• Last Updated:
  • Nov 26th, 2020 1:19 pm
Newbie
Jun 2, 2019
9 posts
3 upvotes
I'm considering the smith manoeuvre, but I have a room rented out in my principle residence, so it is already eligible to have interest deducted. How would this work then if I were to use the readvanceable line of credit tied to my home to invest?
Newbie
User avatar
Jul 7, 2019
5 posts
Malazk wrote: I think I got you, you mean something like this would be better:

Image
shouldn't the rental income and the dividend income go to your main account which you'll use to pre pay your primary residence?
Newbie
Jun 15, 2020
14 posts
MichaelS26074 wrote: shouldn't the rental income and the dividend income go to your main account which you'll use to pre pay your primary residence?
Doesn't have to be the main account above, I will use the scotia chequing account to prepay the mortgage because it is easier to prepay from the same bank app.
Newbie
Mar 15, 2012
46 posts
15 upvotes
TORONTO
Malazk wrote: I think I got you, you mean something like this would be better:

Image
To cash dam in the above diagram, can I eliminate the simplii chequing account and just pay all expenses through the chequing account and HELOC since they would be with the same institution? All rental income goes into separate chequing account to principal mortgage prepayment?
Sr. Member
Oct 2, 2013
687 posts
150 upvotes
Mississauga
Can we claim trading costs to buy investments in the same way we will be claiming interest costs ?

or do we have to calculate that separately and take that out of the heloc balance?
Deal Addict
Jan 2, 2013
1240 posts
241 upvotes
The XLS sheet no longer works. Is there another calculator that can be used?
Deal Addict
User avatar
Jan 2, 2012
3913 posts
1772 upvotes
Toronto
asgr815 wrote: Can we claim trading costs to buy investments in the same way we will be claiming interest costs ?

or do we have to calculate that separately and take that out of the heloc balance?
Trading costs like stock sale commissions, are only claimed when you eventually sell and used to deduct from total capital gains.

Costs like paying fees for a financial advisor, I think are deductible as carrying costs against the HELOC interest yearly. But not entirely sure on this as I've never used personally.
Sr. Member
Oct 2, 2013
687 posts
150 upvotes
Mississauga
rob444 wrote: Trading costs like stock sale commissions, are only claimed when you eventually sell and used to deduct from total capital gains.

Costs like paying fees for a financial advisor, I think are deductible as carrying costs against the HELOC interest yearly. But not entirely sure on this as I've never used personally.
Hi Rob, thanks for your explanation but i was specifically asking about Commission which is charged when we buy stocks

e-g I transfer $1000 Heloc to Questrade, I buy shares worth 995.05 dollars and trading cost/commission for that transaction is 4.95

Now at the end of the month i pay heloc interest on 1000 or 1000-4.95=995.05 ?

Similarly at the end of the year do i claim 1000 in taxes as borrowed funds to invest or 1000-4.95= 995.05 ?
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Deal Addict
User avatar
Jan 2, 2012
3913 posts
1772 upvotes
Toronto
asgr815 wrote: Hi Rob, thanks for your explanation but i was specifically asking about Commission which is charged when we buy stocks

e-g I transfer $1000 Heloc to Questrade, I buy shares worth 995.05 dollars and trading cost/commission for that transaction is 4.95

Now at the end of the month i pay heloc interest on 1000 or 1000-4.95=995.05 ?

Similarly at the end of the year do i claim 1000 in taxes as borrowed funds to invest or 1000-4.95= 995.05 ?

Untitled.png
You pay and claim HELOC interest on full $1000 amount. Include the buy and sell commissions.

You will only consider the buy/sell commissions when you sell the stock as it figures into your capital gains.
Member
Apr 8, 2017
214 posts
62 upvotes
Suggestion to the knowledgeable contributors on this board to update the thread summary with updated information such as:

- Lenders (RBC not on the list)
- Link to calculators, websites, posts in this thread rich in information, link to Rodbarc Dividend Investing thread,...etc
- Sample investment portfolios and pros/cons of each - Ex; ETF portfolio, easy to implement, minimum or no Divs; Canadian Dividend portfolio, more complicated but better results,...etc

I would have loved to do this myself, but i haven't started implementing this strategy so i do not want to act like a pro just from reading through this thread. Overall great amount of information in here!!
Deal Addict
Nov 10, 2012
2114 posts
1406 upvotes
Calgary
Anyone know if the CIBC Home Power Plan allows the HELOC to be split into sub accounts? Also, can you direct pay from CIBC HELOC to an investment account (say Questrade or TDDI)?
Newbie
Jun 15, 2020
14 posts
Are there any Canadian dividend ETFs that have no ROC ?
I have been looking through this thread and other sources, I can see all the warnings about ROC and REITs, the MER of ETFs, the risks of selecting individual stocks, but I don't see solutions. What are the ETFs with no ROC? or individual stocks that SM people hold ? and how do they avoid the complications I mentioned?
I am in the process of selecting those and looking for some advice.
Newbie
Oct 29, 2016
6 posts
1 upvote
jarfgames wrote: Anyone know if the CIBC Home Power Plan allows the HELOC to be split into sub accounts? Also, can you direct pay from CIBC HELOC to an investment account (say Questrade or TDDI)?
I spoke with CIBC on this and they said no sub accounts, it is only one HELOC account that all the funds go through.
Deal Addict
Nov 10, 2012
2114 posts
1406 upvotes
Calgary
Malazk wrote: Are there any Canadian dividend ETFs that have no ROC ?
I have been looking through this thread and other sources, I can see all the warnings about ROC and REITs, the MER of ETFs, the risks of selecting individual stocks, but I don't see solutions. What are the ETFs with no ROC? or individual stocks that SM people hold ? and how do they avoid the complications I mentioned?
I am in the process of selecting those and looking for some advice.
So far I have been looking at the past number of years of distributions from the TD e-series funds. They seem to have not paid ROC in many of them over the past number of years. I am definitely interested in any responses to your original question. I don’t plan on using the “prime the pump” strategy to kick things off, so seems a bit silly to be buying individual stocks at least at the beginning.
Newbie
Jun 15, 2020
14 posts
jarfgames wrote: So far I have been looking at the past number of years of distributions from the TD e-series funds. They seem to have not paid ROC in many of them over the past number of years. I am definitely interested in any responses to your original question. I don’t plan on using the “prime the pump” strategy to kick things off, so seems a bit silly to be buying individual stocks at least at the beginning.
I am trying to focus on Canadian dividend ETFs, I reached a dead end, there is no ETF that will guarantee that.
Alternatively I am looking at stocks, but again, how do I know if a stock distribute some ROC as part of its dividend ? such as IGM which I am considering at the moment.
I really hope some experienced guys could weigh in on this. I am ready to start but stuck on how to go from here.

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