All Forum Posts by: Gurpy Ont

@Jason Werner The issues are very country specific. I would suggest talking to someone who is already doing it.

https://myusapropertynightmare.wordpress.com/ has summarized his experience as an Aussie.

I self managed an across-town property for few years, and will never do it again. Find a property manager.

@Akash Y. Was that rate for investment or personal property. Did you secure the loan in Canada? US rates are quite higher.

No credit for taxes paid in US for sure. 

US taxes it as partnership income, and CRA views it as corporation income. So it ends up getting taxed thrice: US tax, Canadian corporate tax and then dividend tax.

We (Canadian and US partner) are buying rental property in US. We formed an LLC, but it will result in double taxes, since LLC, LLP, LLLP are not considered partnership in Canada.

Is it ok to transfer the ownership of this LLC to a Limited/General partnership. Are there any issues to be aware of, besides additional paperwork.

Final structure would look like: Partners --> LP --> LLC --> property.

Podcast 196 raises an interesting viewpoint on this issue. Bank can proactively check and screw you, when interest rates rise and they want to redeploy the capital. This would be the low hanging fruit.

What I have understood so far is, that only GP and LP are considered flow-through partnerships in Canada. So advise being given out is to create a LP, and join as limited partner(s), and have a LLC with 1% share as general partner (which assumes the liability risk).

Another option is to hold the LLC holding the property in the LP. Still trying to confirm the viability.

Other complex options involve creating Canadian corporations and US corporations, but these are overkill for an investor who is just starting out.

Thanks @Account Closed. 

I am Canadian, and the question was related to tax election of an LLC. At this point it is clear that tax-as-a-corporation is not the way to go.

Canada does not recognize LLC (and LLP and LLLP) as partnerships and we get double taxed. I thought it could be mitigated by not getting any dividends from LLC, but that doesn't appear to be the case.

I will start another topic to ask questions about our available options.

Thanks @Ashish Acharya

Thanks @Andy, but I was omitting the pay yourself option. 

Is it a fair statement, that in the event of a single hit - its better to be taxes as individual rather then a corporation.