Quote:
Originally Posted by Slava
I am very familiar with the idea, but for some reason I thought that buying property wasn't eligible. The Smith Manoeuvre works because the investment is often stocks/mutual funds that pay dividends/interest. That isn't what you get directly from the investment property. Regardless, I'm not saying I'm right....which is why I asked!
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It has to be a rental property that produces income. House you're renting out - deduct the interest. Piece of scrub land you're holding outside the city in hopes of eventually selling to a developer for $$$- you capitalize the interest every year, and use it to adjust your cost base for when you sell.