 |
Back to E-mail Index |
|
|
This question comes from
www.jurock.com "ask a tax expert"
PXXXX XXXXXXXX
My question is: Canadian-specific QUESTION: My brother and myself are planning to purchase investment property (most likely an apartment building). My question to you is what is the best way to structure the purchase? We will be puting about 50% down. Our plan is to hold the property and use some of the cash flow for current personal use (we are both retired), with the ultimate goal to pass this property (or properties, eventually, if all goes well) to our adult children. What is the best way to do it with a view to the current situation and also when we pass it on to our 'children', which could happen before our deaths, or via our will on death (I would direct my 50% to my wife, my brother would direct his 50% directly to his children). Should we hold it personally, or is there a partnership or company structure that we should use which would be better from a tax and/or estate point of view? Thank you Pete McLennan ---------------------------------------------------------------------------
david ingram replies
This cannot be answered here without a 200 page manuscript
full of "what ifs", "maybe you shoulds", and "why nots".
* You could buy it as a joint venture.
* You could buy it as a limited partnership
with the majority of the growth ownership in the kids and your wife's name.
* You could buy it as a corporation.
* You could buy it tenants in common.
* You could set up two inter vivos trusts.
* You could set up two family trusts.
* You could set up two life estates as
partners - you and your brother get the income while you are alive but your
intended heirs own the property right now and get any increased capital gains
value. When you "die", your estates have no capital gains tax to pay.
* If you also have children, you could set
up a joint life estate for yourself and your wife with your children owning the
estate.
* You could set up an offshore trust with
your wife and his children as beneficiaries.
The hardest part is that there is NO best or better way.
Any of the above could be the best method for you and your brother.
I would be inclined to suggest that you and your brother and
your wife and some of the children sit down with someone like myself and
explore the possiblities. If you were to come to my office, I would want to see
the past two years of tax returns for the parties involved. I would want
to know your life expectancy. I would want to know why you want the
property to go to your wife and his children.
I would want to know if you were life insurable because it is
easier and sometimes more efficient to forget aobut trying to avoid tax and
just arrange to have it covered by a life insurance policy.
Hope this helps.
My contact information follows.
US / Canada / Mexico Income Tax and Working Visa Matters
108-100 Park Royal South West Vancouver, BC, CANADA V7T 1A2
(604) 913-9133 Fax (604) 913-9123
Cell (604) 657-8451 10 AM to 10 PM 7 days a week |
|
|
