Corp, loan to purchase or refi house.

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Jul 3rd, 2015 5:46 pm

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Jul 2nd, 2015 4:05 pm

slavka012 [OP]: Deal Addict; Dec 13, 2007; 2026 posts; 542 upvotes; Toronto

Jul 2nd, 2015 4:05 pm

Corp, loan to purchase or refi house.

Few years back I opened a HELOC and took X$$ from it. Now I have >X$$ in corp account. Technically I can loan that money to pay off my HELOC, and it looks like that would be legit loan from corp. Then, I could take the same X$$ from HELOC again, and buy some investments like ETFs or whatever. The I can treat my HELOC as tax deductible investment loan. (Everything correct so far?)

Question, can I skip the part or payment to HELOC and widrawing money once again, and go straight for purchasing investments with the money I have in corp acct? The problem is I have a whole bunch in USD, and I'd rather purchase ETFs for USD than to convert these to CDN.

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Jul 2nd, 2015 6:52 pm

koft: Deal Addict; Jul 21, 2004; 1340 posts; 285 upvotes

Jul 2nd, 2015 6:52 pm

The question would be do you want it to be considered as a corp investment or a personal investment.

if you are treating it as personal. you would want a paper trail so cra don't audit you as a corp investment

Heatware

Jul 2nd, 2015 10:37 pm

adeel: Deal Fanatic; Aug 21, 2007; 5906 posts; 742 upvotes; Markham

Jul 2nd, 2015 10:37 pm

slavka012 wrote: ↑Few years back I opened a HELOC and took X$$ from it. Now I have >X$$ in corp account. Technically I can loan that money to pay off my HELOC, and it looks like that would be legit loan from corp. Then, I could take the same X$$ from HELOC again, and buy some investments like ETFs or whatever. The I can treat my HELOC as tax deductible investment loan. (Everything correct so far?)

Question, can I skip the part or payment to HELOC and widrawing money once again, and go straight for purchasing investments with the money I have in corp acct? The problem is I have a whole bunch in USD, and I'd rather purchase ETFs for USD than to convert these to CDN.

you could, but investment income in corps have different taxation rules, which are generally not all that favourable. Dividends taxed at 33.33% (until withdrawn from the corp in form of dividends out), interest at 462/3, again until dividend out...cap gains also 462/3 but only half of the gain is taxed.

Jul 2nd, 2015 11:14 pm

slavka012 [OP]: Deal Addict; Dec 13, 2007; 2026 posts; 542 upvotes; Toronto

Jul 2nd, 2015 11:14 pm

Personal, of course. Ideally I'd like to skip actually paying of HELOC but have tax deductuble HELOC and loan from corp for the purpose of purchasing home.

Jul 3rd, 2015 5:46 pm

adeel: Deal Fanatic; Aug 21, 2007; 5906 posts; 742 upvotes; Markham

Jul 3rd, 2015 5:46 pm

i suppose you could ultimately open a personal account and fund it using the money thats in your corp account as a way of skipping steps, but sometimes actions are taken to create a paper trail in case of audit...otherwise if your HELOC balance hasnt changed an auditor may not let it go

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