Making your Mortgage Interest Tax Deductible

Introducing a powerful way for you to turn the largest debt of your lifetime into annual tax refunds, knock years off your mortgage, and build a larger retirement portfolio at the same time, using legal tools from the CRA. Because you are able to deduct interest paid on money borrowed to invest it is all about paper trail. To be able to claim this deduction you must be able to show that the borrowed money did get placed into a qualified investment. The first step to making your mortgage interest tax deductible is to get a re-advanceable mortgage, such as a home equity line of credit. Next you must get as much liquid cash as you can from assets and investments. Use this liquid cash to pay down your mortgage, and then reborrow the same amount that you paid down. Use this newly borrowed money to purchase new qualified investments and you now have a legitimate tax deduction on that portion of your mortgage interest. Now with any tax savings or other lump sums of money you get, continue to pay down your mortgage, reborrow and invest. Use this method to continue to increase your tax deduction and build your retirement portfolio!

Interest and Carrying Charges Deduction

If you borrowed money to invest you may be able to deduct the interest and charges associated with the borrowed funds. The main exception to this is if the borrowed funds were put into an RRSP, TFSA or your personal residence. However, if it is a qualified investment and you are claiming investment income, you may be able to deduct the interest and fees paid on the borrowed funds, fees for managing the investment, safety deposit box fees, associated accounting fees, brokerage fees and investment counsel fees. If you have a mortgage on your personal residence and you have other assets or investments that can be turned into cash you may be able to begin transitioning your personal residence mortgage so that you are able to deduct some or all of the interest paid. Considering personal mortgages are one of many peoples’ biggest expenses why not make the interest a tax deduction. To learn more on this see our blog “Making your Mortgage Interest Tax Deductible.”