Discussion
Thanks guys. The capital gains on the house won't hit me as there's no way I'll pass the 250K increase mark, and I'm not planning to sell anyway for a while. The house is only worth 375 on a good day so that would be a pretty big increase.
It looks like my income tax would be offset in whichever direction applies depending on where I work and which company I decide to be in, but I will contact the company recommended earlier nearer the time.
It looks like my income tax would be offset in whichever direction applies depending on where I work and which company I decide to be in, but I will contact the company recommended earlier nearer the time.
mr_spock said:
The Moose said:
Don’t forget to take the depreciation of your property into account with your calculations.
How do you mean? If you own property your base in that property is depreciated each year. For example, if you paid $100,000 to buy it, each year that reduces by 1/40th (maybe the right fraction) and it goes as a credit against your income.
What this serves to do is to reduce your base in the property. They assume that property is devaluing each year and so you don’t end up with a massive loss on paper and don’t have the income to offset it against.
What happens is that even if the property value remains static, you still build a capital gain each year. Oh, and all this is before you take the varying exchange rate and repaying a mortgage into account!
If you’re smart, I believe it can actually work in your favor...but you have to be aware of it and “play” the system as you go along. They also allow you to do a tax deferred exchange if you’re buying another (investment) property.
Edited by The Moose on Monday 30th September 00:08
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