PART II - Who should own a rental condo? - ask a West

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I love it when others point out things I might have missed or
overlooked in an answer.
Ross McDonald, a former business partner of mine and a Realtor
(Lighthouse Realty in Abbotsford) and the operator of a CEN-TA
Tax office in Abbotsford (604) 855-7393 sends the following about
the proposed REOP rules proposed by the CRA.
Ross, Betty Scott, Ted Bradshaw and I put together and sold over
2,000 rental  conso units over the years.
David Stoller, a Lawyer in West Vancouover at (604) 922-4702 has
sent a cautionary note that if they decided to switch the
ownership officially in the future, there would be PPT (property
purchase tax) to pay between the husband and the wife because it
is a rental unit.
david ingram
-----Original Message-----
From: Ross McDonald [mailto:[email protected]]
Sent: Wednesday, April 21, 2004 7:45 AM
To: [email protected]
Subject: RE:  Who should own a rental condo? - ask a
West Vancouver   income tax and real estate expert - david Ingram
tax consultant preparer consultant specialist tax
Hi David,
Don’t know how you find the time to answer any questions right
now.  But this lady has another issue to consider.  It sounds
like the property will have a negative cash flow and if the new
REOP (Reasonable Expectation of Profit) rules go ahead then
starting in 2005 the deductibility of interest may be restricted
and her husband may not be able to claim the rental loss against
his other income.
Ross McDonald
-----Original Message-----
From: [email protected]
[mailto:[email protected]] On Behalf Of
[email protected]
Sent: Wednesday, April 21, 2004 12:52 AM
To: CENTAPEDE
Subject:  Who should own a rental condo? - ask a West
Vancouverincome tax and real estate expert - david Ingram tax
consultant preparer consultant specialist tax
My question is: Canadian-specific
QUESTION: My husband and I are buying a condo for rental
purposes. Whose name should it be in? I don't work and he has a
high income. We are hoping to use it against his income.
Thank You
=================================================================
=======
david ingram replies:
If it loses money on an annual basis, it would be better in his
name in the short term.  However, if it starts making money and
does sell for a profit, you will be paying higher tax.  You also
have to worry about the attribution rules which say that it does
not matter whose name a property is in when it involves a husband
and wife, it depends upon who paid for the property (section
74.1).
Before you buy, you should consider making your mortgage
deductible. try reading my November 2001 newsletter (may be 5 or
6 times).   It has several methods you can use to make your
mortgage deductible including using rents from a condo.  Goto
www.centa.com and find the newsletter section.  READ November
2001.
In addition, if you happen to live in the lower mainland, we will
be giving a free seminar (limited to 16 people) at 1764 West
Seventh in Vancouver at 7 PM on Thursday, April 22.
Call (604) 731-8900 to register.
=========================================
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