Using Smith Manoeuvre to make mortgage interest deductible -

QUESTION: My wife and I have a $300K mortgage (Manulife One account) that we
have began converting into a tax deductible investment loan. Right now we
are doing this by borrowing back the principal each month to invest it. We
are looking to accelerate this conversion from good debt to bad debt by
starting an unincorporated business (ala Cash Flow Dam strategy). My
question is: if we purchase a cottage rental business or campground in a
Parnership with my parents will we be able to still borrow from our Manulife
One account to pay all the business expenses each month? Or is there a twist
because my wife and I don't own 100% of the Partnership or asset (campground
or cottage rentals)?
david ingram replies:
You can use the partnership income as well.  Just watch your paper trail.
You should also go to and read the November 2001 newsletter in
the top left hand box.  This was originally written in Nov 1976 and is the
first known place where making a Canadian mortgage deductible is explored in
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -
(please do not fax or phone outside of those hours as this is a home office)
email to taxman at <mailto:taxman at> <>
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 for expert help, assistance, preparation, or
consultation  in connection with personal or business affairs such as at <> . If you forward this message, this
disclaimer must be included."
Be ALERT,  the world needs more "lerts"
David Ingram gives expert income tax & immigration help to non-resident
Americans & Canadians from New York to California to Mexico  family, estate,
income trust trusts Cross border, dual citizen - out of country investments
are all handled with competence & authority.


Trackback URL for this entry:

No trackback comments for this entry.