Cash Damming - How exactly does it work?

[drpeprchick]

My hubby & I are looking to buy a rental property with 2 units...I`ve heard a bit about cash damming and can`t quite get my head around it....can anyone explain it in simple terms?

Thanks so much

 

[jcab256]

QUOTE (drpeprchick @ May 15 2009, 05:41 AM) My hubby & I are looking to buy a rental property with 2 units...I`ve heard a bit about cash damming and can`t quite get my head around it....can anyone explain it in simple terms?

Thanks so much


Here is a quick description:
http://www.canadianmortgagetrends.com/cana...h-flow-dam.html

 

[jcab256]

and here is an explanation right from CRA!

See section 16

http://www.cra-arc.gc.ca/E/pub/tp/it533/it533-e.pdf

 

[housingrental]

I`ve never heard that term used before to describe this..