My question is: Canadian-specific QUESTION: I am currently looking at flipping a house. It will sell for $90,000 and will need $40,000 in upgrades. On our local market I should receive $150,000 to $165,000 when it is done. The work will be done primarily by myself. What is the tax situation for the flip? What kind of return will I make? I am in the %40 tax bracket. If I envolve a friend should we set up a company to share profits and expenses? thank-you ----------------------------------------------------------------- ---------- david ingram replies: A company may be a good idea but will add to your cost and not save any tax if you are going to take the profits to live on. This is not very accurate because every province is different but if I assumed that you already have another $30,000 of income from a job, then you would pay from 27 to 33 % tax on the next $35,000 which is the amount of profit you seem to be expecting. The following is a prior answer to the same or a similar question. My question is: Canadian-specific QUESTION: Hello, I've recently been very interested in the idea of partnering with my family and buying, fixing up and then reselling homes. It looks like this works great in the US, however, after mentioning this idea to a realtor here in the Lower Mainland im not so sure. What type of tax implications are there for doing something like this? Does this actually turn out to be a good way to make a profit? Thanks, Dxxxxxxx ----------------------------------------------------------------- ---------- david ingram replies: If you buy property with the "right" things wrong, being a renovator can be extremely rewarding and profitable. By the right things wrong, I mean cosmetic items that can be cleaned up and put right. cleaning up the yard replacing light fixtures and painting maybe a new counter top but not all new cabinets. NOTHING STRUCTURAL. However most newcomers and amateurs end up buying a building with structural problems or they decide to do a kitchen and end up with a nightmare of expensive rewiring, re plumbing, dry rot and maybe a crumbling foundation. It is NOT a job for amateurs. Because it is a BUSINESS, any profits are taxable at regular tax rates in the US and / or Canada. Good Luck. Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram am a permanent guest on Fred Snyder of Dundee Wealth Managers' LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com <http://www.600am.com/> Call (604) 280-0600 to have your question answered. BC listeners can also call 1-866-778-0600. Callers to the show and questioners on this board can also attend the Thursday Night seminars on finance and making your Canadian Mortgage Interest deductible. David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Res (604) 980-3578 Cell (604) 657-8451 (604) 980-0321 New email to davidingram at shaw.ca <mailto:davidingram at shaw.ca> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist in connection with personal or business affairs such as at www.centa.com <http://www.centa.com> . 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