本文发表在 rolia.net 枫下论坛Joey, with the advice of his astute tax advisor, decides to sell his principal residence to his parents for the fair market value of $700,000. His parents, not having the $700,000 cash lying around to cover this purchase, pay him by way of a promissory note.
Joey then obtains a mortgage or HELOC and uses the proceeds from this loan to buy back the house from his parents, to use as a rental property. His parents use the proceeds of the loan to pay off the promissory note. Joey, now flush with cash, uses the re-acquired property for rental purposes and purchases his new principal residence with the cash.
The reason for these complex maneuverings is to ensure that Joey meets the “direct use test” as outlined in the CRA’s Interpretation Bulletin on interest deductibility which states that in determining what borrowed money has been used for, the onus is on the taxpayer “to trace or link the borrowed money to a specific eligible use, giving effect to the existing legal relationships.” The Bulletin goes on to say that “a taxpayer may restructure borrowings and the ownership of assets to meet the direct use test.”更多精彩文章及讨论,请光临枫下论坛 rolia.net