Sec 74.1 75.1 Switching property into one spouse name

My question is: Canadian-specific
QUESTION: My husband and I plan to use the equity from one rental property (which we jointly own) as the downpayment to purchase another rental property (which will be in my husband's name only). Apart from the downpayment, the property will carry itself and we will not put any more of our own money into it.  When we sell the second property (which is in my husband's name), will any of the capital gains be attributed to me? We would like to avoid this, since I am in a higher tax bracket. 
david ingram replies:
Section 74.1 of the Canadian Income Tax Act makes it very clear that with a married couple it does not matter whose name "any" investment is in, the taxation depends on who put the money up.
Therefore, if you are the higher earner and it was "your" money that bought the existing rental property and the property was put in your name, the taxation on any profit or loss as the case might be would be yours even if the property was in both names or even all in his.
Therfore, any equity that is borrowed out of the property is logically that of the true monetary owners.  If it was yours, the whole next property is / would be yours.  
If, on the other hand the present rental was bought with a down payment from your husband's father's estate, then the whole property would be his.
Borrowed money is treated differently than it would be treated if you sold the property at theis moment.
If that was the case and you had given your husband half and a third party now bought it and the third party paid the profit part, than the third party's paymnet would belong to your husband, even though, under section 75.1 any 
Capital gains tax would be payable by you.
In the case of a sale, your husband could take his half and invest it without the attribution rules applying because it was paid by a third party.
It is easy to switch money from your account to his however although it takes a bit of manipulation and "stalwartness".
For instance, the rental gets rent each month.
Your husband could take his half of the gross rent and use it to make a new investment. Everything from the new investment would be taxable to him because the rent was paid by a third party.
I hate to get commercial, but the two of you should sit down with someone like myself and work it out.  You can do it yourself with an electronic spread sheet of course.
For the record, I would charge you $350 plus GST for an hour's consultation which would get you set up in the right direction.  AND, in truth, you should be able to put it together with the answer I have given.
You can also use the rental income from the present house and the next one to make your personal residence mortage interest deductible.  If you go to and read the November 2001 newsletter, it will explain the process in more detail. 
And, if you want to talk about it "free" on teh radio,
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, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet at 
Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. 
Old shows are archived at the site.
This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer  from or or Canadian David Ingram deals daily with tax returns dealing with expatriate:
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Disclaimer:  This question has been answered 
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non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at
The same thing applys to the rent received.  If your 
This can be solved and changed by having your hus
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