My question is: Canadian-specific QUESTION: I bought a property 2003,October, which was purchased for 110,000 first time buyer 5%, I have a morgage at 5.9% for 10 years. Recently, in this area prices have risen almost 30% for Mount Pleasant very good! Could i re-finance and take out the equity? We have put about 5 thousand into fixing, updating...and believe our property now valued at least 160,000! Does that mean we could take out 30,000? Could we then re-invest this money on a rental property and not get capital gains? Thank-you. --------------------------------------------------------------------------- david ingram replies: The answer is yes. If you borrow $30,000 based upon the increased equity in your Mount Pleasant, Vancouver, BC home, the $30,000 is not deductible. If you were to use the $30,000 to buy a boat or a summer cabin or a ski chalet which was for personal use only, the interest would NOT be deductible. But if you use the $30,000 to buy a rental house, the interest "will" be deductible against the rental income. If it results in a rental loss, the rental loss can be used as a deduction against other income. The nice part is that you can then use the rental income to make your first mortgage deductible over a number of years. Goto www.centa.com and read the Nov 2001 newsletter on Mortgage interest as a deduction. In addition, because you live in Vancouver, you can attend one Fred Snyder 's and my seminars on mortgage interest as a deduction as follows: Every Thursday evening Fred Snyder and I hold a free seminar at Fred's office at 1764 West 7th (corner of Burrard in the Spence Diamond building) in Vancouver. The topics are: Seg funds and an alternative to the traditional RRSP. Making your mortgage income tax deductible coffee and sometimes cookies of course. Phone 604-731-8900 to reserve your seat -and, you are welcome to bring your brother, your sister, your mother or father, your children, your best friend, your worst enemy or your own financial advisor who hasn't explained how to make your mortgage deductible. And remember 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 Dundee Wealth Management and I, David Ingram 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 www.600AM.com <http://www.600am.com/> Local calls are taken at (604) 280-0600 and Long Distance calls are taken at 1( 866) 778-0600 ========================================= David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Res (604) 980-3578 Cell (604) 657-8451 (604) 980-0321 Fax (604) 980-0325 Email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com> www.david-ingram.com <http://www.david-ingram.com/> 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 in connection with personal or business affairs such as at www.centa.com <http://www.centa.com> . If you forward this message, this disclaimer must be included." Be ALERT, the world needs more "lerts" ==============================
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