I understand that if I build a new home with the sole purpose of reselling it then CRA will determine that I am in the business of building and selling homes and treat my profit as business income.
My question is this. If I use some of the aforementioned profit to go and purchase a piece of land, or perhaps use as a downpayment on a house (in the same calandar year), does that new land or property get treated as business inventory, as the home I just sold was?
I guess you can all see what I am getting at. I don't mind my profit being treated as business income, but if I go and buy more inventory, then I see no reason it cannot be deducted from my 'income'.
Not sure this forum has anyone equippe dto answer, but surely someone has asked or come across this issue before.
Cheers
Tony
My question is this. If I use some of the aforementioned profit to go and purchase a piece of land, or perhaps use as a downpayment on a house (in the same calandar year), does that new land or property get treated as business inventory, as the home I just sold was?
I guess you can all see what I am getting at. I don't mind my profit being treated as business income, but if I go and buy more inventory, then I see no reason it cannot be deducted from my 'income'.
Not sure this forum has anyone equippe dto answer, but surely someone has asked or come across this issue before.
Cheers
Tony