Tax question

[Newby1983]

My wife is in lower tax bracket. Some say to put title of investment property in her name (postive cash flow expected). My accountant agreed.



My banker said best to put both names on title as CRA will only ask one of us to claim the income (naturally that would be her if this is allowed).



We only own 1 property. Is it true CRA doesn't care who claims income?

 

[DonCampbell]

Hi,



You are at the point of requiring good accounting advise. Although I am sure that your banker is giving you the advice that he knows.... It is imperative that you get a good investment property accountant.



Search this forum for some good one (search box on top right of page.



It is important to know that there is no black and white answer to structure questions as each individual position differs (time lines, income, length of expected hold, # of expected properties etc etc.)





.

 

[Thomas Beyer]

Legal and beneficial owner can be different. Thus title could be both names and beneficial income, losses or gains in your wife's name.



While holding with a sizeable mortgage there is usually no tax payable due to depreciation ( also referred to as CCA, Capital Cost Allowance) of 4% annual of asset value excl. land. However this CCA has to be recaptured on sale.



There is capitals gains tax payable on sale, assuming there is a gain, of course. Presumably that is then allocated to the beneficial owner, the lower income earner.

 

[jonathanb]

Also, keep your long term goals in mind. If your goal is to own many investment properties, having only one name on title will certainly benefit you as most conventional lenders limit the number of mortgages per person to 5. If you and your wife are both on title, this counts as one mortgage each.



Hope this helps,



Jon