My question is: Canadian-specific
QUESTION: I bought a half-duplex in Strathcona for 390k in July 2005. I
intended to keep it for about 3-5 years before selling (took a 5 yr. closed
mortgage at 4.1%, with about 100k down). It is tenanted at $1850/mo. I just
had it appraised and as a result (it was appraised at 441k), have decided to
put it up on the market in January 2006, and use the proceeds as a
downpayment on a legal triplex that I will live in while renting out the 2
other suites (completion on triplex to be complete March 2006). My question
is: because I am essentially "flipping" the half-duplex, will I be taxed on
it as straight income, or as a capital gain? Also, are there any
implications that I should be aware of regarding selling one investment
property in order to finance another "partial" investment property? Also of
note may be the fact that I have been underemployed this past year and will
have very little incoome to report in 2005 - but since the sale and purchase
of the 2 properties will occur in early 2006, is this even relevant? It all
seems terribly complicated and I'd be extremely grateful for any insight you
could share on this matter.
