interest deduction for apartment rented to son - Canadian-USA-Global tax help - Fred Snyder Show - david ingram expert US CANADA

XXXXX wrote:
Below is the result of your feedback form.  It was submitted by
XXXXX  on Monday, May 25, 2009 at 20:51:48

My_question_is: Canadian-specific

question: I used a line of credit to purchase property.  
The property is being occupied by our son.  Is the interest on 
the line of credit deductible.
thank you

david ingram replies:

Assuming you are renting the property to your son, interest can be deducted up to the creation of a zero return.  If a family member or other personal; use is involved you can not use interest to create a loss.

An exception would be if you owned a condo in a building where 100 condos (as an example) were rented for "x' dollars.  In that case, if you could prove that the condo was rented for fair market value, you could create a loss against other income.
hope this helps

Today,  I realized I have some 800 unanswered questions.  I do not know how they get to be that many.  I had them down to a very few at the end of November but have been swamped  since and have hardly answered any even though my intention is to answer two free strange questions a day..

We will be discussing US Canada Income Tax and Immigration and investment matters at next Wednesday at 8 PM at on the Internet.

You can try calling 1-866-980-0499 between 7 and 8 PM Wednesday April 29, 2009 (Vancouver / LA / Seattle Time).  At that time, Dan Walkow and I will be answering US / Canada income tax and investment questions free of  charge.  Dan would normally only look after  accounts in the $200,000  range but for these programs, we deal with any amounts.  I normally charge a minimum of $450 for a consultation of up to an hour but if you have one of those "quick' questions that only takes a minute or two, this is the time to get that question answered free of charge.  You can see more of Dan at

At 6 PM on the 29th, Bill Vander Zalm, former premier of BC will be on to talk about his new tell all book and we might even get around to talking about the upcoming May 12th election, the transferable vote and Indian Land Claims.

The following was my April 27, 2008 version when i gave up on ever getting to about 1,000 emails.    The problem is that I keep on putting things aside that I want to answer but just do not get to.  I have, by the way, answered over 300 unsolicited emails at the  same time.


david ingram replies:

However, if you can not find your answer at the site, answers to this and other similar  questions can be obtained 'FREE' on Air on most Sundays and always on the first  Sunday of each month
On the First Sunday, you can find me as a guest on Fred Snyder's show on 650 AM, CISLE Radio from 9 AM to 10:30 AM and on
the first Sunday from 5 PM to 6PM on CKNW (980 AM on the dial) in Vancouver, david ingram will be  a  guest on Fred Snyder of Dundee Wealth Management's Radio Program, "It's YOUR Money". If you are not in the Vancouver Area, you can still hear it live (or in archives for four weeks) at
Calls to the show can be made to (604) 280-9898 - The long distance line is free throughout BC only at (877) 399-9898 or cell at *9898.
Callers to the Show can also come out on Thursdays at noon or 7PM at night to one of our free seminars. Each one of the 2 1/2 hour seminars devotes at least 20 minutes to mortgaging and making all interest deductible

Every Thursday Evening, Fred Snyder of Dundee Wealth Management conducts one of 23 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 and there is usually a Noon hour seminar as well.   At the noon hour seminar, Fred even provides Sandwiches and coffee.

No cost - no obligation

Topics always cover mortgage interest as a deduction

other topics - getting the mortgage, estate planning, critical care insurance, income taxation (3 nights), differences between stocks and bonds, and usually the most innovative HELOC mortgage offered in Canada from Manulife Bank as presented by Stuart Rodger  of Manulife (604) 351-6133,
Those on Vancouver Island can attend Ralph Hahmann's Tuesday Evening Seminars on McKenzie Avenue in Victoria. (250) 472-0700.Ralph is also with Dundee Wealth Management and is a specialist in Pension Payouts and the co-author of the best selling book, "the Pension Paradigm:.



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) expert  US Canada Canadian American  Mexican Income Tax  service help.
pert  US Canada Canadian American  Mexican Income Tax  service and help.
David Ingram gives expert income tax service & 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.
Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST if in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
$1,200 would be the same with one rental
$1,300 would be the same with one business no rental
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
A Business for $400 - Rental and business likely $550 to $700
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.

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