mortgage interest as a deduction -

My question is: Canadian-specific
QUESTION: Hello,
I would like to know if it is possible to get a loan, buy stocks, short the
stocks, take the proceeds from the short (or as much as you can while
leaving enough margin balance in the account) and plop it down on a mortgage
on a primary residence.
That way you can possibly pay off your primary residence mortgage and
replace it with a tax deductible loan to do it. The long stock and short
stocks cancel each other out in perpetuity.
Will this be acceptible to revenue canada?
Thanks
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david ingram replies:
Sorry.  As soon as you change the nature of the loan from investment to
personal, it is no longer deductible.  Bulletin IT=533 is very clear on
this.
 http://www.cra-arc.gc.ca/E/pub/tp/it533/it533-e.html
The following is another try which will not work
------------------------------
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Hi David,
I have a question for you. If I took out funds from my chequing
account to purchase a rental property.  But then took out the
same amount in funds from my line of credit to put back into my
chequing account, would the interest from the line of credit be
tax deductible?
Thanks,
N XXXXXXXXXXX
================================
david ingram replies:
The interest would not be deductible because the borrowed money
was not used directly to buy the rental property.
Read Bulletin IT 533 which you can find in PDF or HTML format at
http://www.cra-arc.gc.ca/E/pub/tp/it533/README.html
Also read the November 2001 newsletter on the left side at
www.centa.com
Then get hold of Fraser Smith's book, the SMITH MANOEUVRE and
read it as well.
The order must be perfect to make it work.
Then come out on Thursday night to one of our free seminars.
Each one of the 2 1/2 hour seminars devotes at least 45 minutes
to mortgaging and making all interest deductible
Every Thursday Evening, Fred Snyder of Dundee Wealth Management
conducts one of 17 different financial seminars at his office
Time:    7:00 to 9:30 PM
Date:    Every Thursday evening
Place    1764 West Seventh
             Vancouver (corner of Burrard)
Phone (604) 731-8900 to register
No cost - no obligation
Topics always cover mortgage interest as a deduction
other topics - getting the mortgage, estate planning, critical
care insurance, income taxation, differences between stocks and
bonds, and usually the most innovative HELOC mortgage offered in
Canada from Manulife Bank
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
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.
This from "ask an income tax and immigration expert" from
www.centa.com or www.jurock.com or www.featureweb.com. David
Ingram deals on a daily basis with expatriate tax returns with:
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David Ingram gives expert income tax & immigration help to non-resident
Americans & Canadians from New York to California to Saudi Arabia to Mexico
to China or Chile - Cross border, dual citizen - out of country investments
are all handled with competence & authority.

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