Can I write off the interest on my principle residence?
Yes you can write off the interest portion of your principle residence mortgage but it requires a little creativity. First off, in order to turn bad debt to good debt, you must be using the mortgage funds for business purposes or an investment. Preferably you already have a readvancable mortgage on your principle residence. If you don’t, it makes this strategy virtually impossible. As you pay down your mortgage (monthly and/ or with lump sum payments), the principle portion opens up into an available LOC (line of credit). You can use these funds for investment and / or business purposes and that portion is now tax deductible.
Another quick strategy to convert a large portion of your principle residence mortgage into a tax deduction would be to take any investments you have (non registered), make a lump sum payment on your readvancable mortgage and then re-obtain those investments back. This turns that portion into a possible tax deduction.
Click HERE to watch the video on TDMP & the Smith Manouevre.
Here is another article I wrong on the Smith Manoeuvre & TDMP, click HERE.
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