How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4069
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I sold my residence property several years ago to use the equity and cash return (virtuall

Customer Question

I sold my residence property several years ago to use the equity and cash return (virtually no mortgage on the property) to purchase properties on auction and build a portfolio of rental properties. Eight years on I now have 5 properties. I've not charged any finance charges in my tax returns these past years.
I have been renting since I sold my main residence. I have now, however, decided that I no longer want to rent and bought a place which is now my residence. Because I used all my previous cash to purchase properties, I had to get a mortgage for my new residence.
My question is - am I allowed to charge the interest charge of this mortgage against my rental income that I get on the 5 properties?
If I did not purchase the 5 properties for cash, I would have the cash now to pay for my residence. Thanks.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
Unfortunately, no. Your loan was against a new property, your sole or main domestic residence. The only way you could offset the interest element against tax would be if you were to let that out also. Now if you had raised the cash by mortgaging the 5 properties then indeed you could offset the interest element only against the rentals, but, unfortunately, this is not the case here.
I am so sorry to have to rain on your parade.