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Money Market Accounts Suntrust

July 3rd, 2011

money market accounts suntrust

Better TV – Suntrust – Real Estate Tips

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Money Market Accounts With Check Writing

May 20th, 2011

money market accounts with check writing
Question: Canadian taxes and a second home?

Here’s the situation: a couple of years ago, we bought a home (mobile) for my parents, pensioners with very low income. They live in it rent free, just paying their own utilities. We even pay the monthly park charges.

The money for the home came from our mortgage (from Manulife, it’s effectively a line of credit on our main residence. Literally, the cheque was written from this account, so it’s very clear the property was bought via the mortgage.

I know you can deduct interest on rental property, but is there any requirement that such rental be a net income situation? Does it have to be rented at at least market rates?

And I suppose lastly, is it possible to start claiming this several years later, or better yet, even back dating it?

Answer: I read up on this last year, because I also bought a mobile home for my mother-in-law.

It’s not the interest on the property you deduct; it’s interest you paid on money borrowed for investment purposes, as long as the investment generates income. That’s pretty much the only requirement – that whatever you invest in produces income (not just a later capital gain). If you’ve heard of the Smith Manoeuvre, this is exactly what that is based on.

Since you invested in a rental property, and you’re getting rent, it qualifies. It doesn’t matter if you are renting to family, or below market rates.

The interest is deducted on line 221. Here’s the info on it:

http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/221/menu-e.html

I don’t see any reason why you can’t refile for the past couple of years to take advantage of this.

Edit: Of course, if you file for this deduction, you also have to declare the income from it. Then you can take costs into account to, and that brings up Ryan’s answer.

Personal Finance & Money Managing : How to Open a Money Market Account