Taxes!! Help!!

  • CherylBottomley

    Status: REIN™ Member

    Posts: 39
    Joined: 18 Sep 2007
    From: Fort McMurray

     Hello!

    My husband & I have been in REIN for almost 7 years.  We own 10 properties and seem to be running into some tax issues over the past few years that we'd like feedback on.  We own all the properties in our personal names.  As the interest rates have been so low, a bigger portion of the mortgage payment goes to mortgage pay-down and less to the interest.  Given we can only deduct the interest, we are finding the 'income' we are showing on paper is much higher than we are actually making in revenue.  Times this over 10 properties and every spring we are faced with a sizable tax liability.  As we don't actually have that income in the bank, we've resorted to depreciating the buildings just to avoid digging deep to pay the tax man.  Yes, we have rrsps but this isn't enough.

    Are we doing something wrong?  My hubby is starting to get very discouraged in this business and I don't want to give up but the numbers don't lie and we are tired of paying money out of our pockets every spring to support the real estate.  All of our properties cash flow nicely so we don't own any dogs in our portfolio and yet we still end up negative without using the depreciation.  This seems like a short term solution and feels like we are just putting off the inevitable.  Anyone else having this experience?

    Any feedback is greatly appreciated! 
    Thank you,
    Cheryl
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  • 927 days old