Interest deduction followed by capital gain?
If I take money from a HELOC and use it to pay off a condo 100%, I understand that I can deduct the interest I pay on the loan as it is "interest on money borrowed to generate income".
When I sell the property down the road, will the gain qualify as capital gain or business income?
The plan is to buy a condo for around $250K in the Yonge and Finch area. At the rate of 4% annually, I will be paying interest of about $833/month. Approximately how much will I "get back" when I file taxes?
Condo fees will be approx. $250-300/month and property taxes will be $125/month approximately. Total expenses with interest equal around $1250/month. Hopefully i can rent it out for around the same, if not a bit more. This will cover my carrying costs till I decide to sell.
Yes, I realize this is speculation, but how does the overall plan sound?
When I sell the property down the road, will the gain qualify as capital gain or business income?
The plan is to buy a condo for around $250K in the Yonge and Finch area. At the rate of 4% annually, I will be paying interest of about $833/month. Approximately how much will I "get back" when I file taxes?
Condo fees will be approx. $250-300/month and property taxes will be $125/month approximately. Total expenses with interest equal around $1250/month. Hopefully i can rent it out for around the same, if not a bit more. This will cover my carrying costs till I decide to sell.
Yes, I realize this is speculation, but how does the overall plan sound?