Hi All,
Another mortgage question from me.
Example:
- An investor purchased a property under a corporation of which he owns 100% of the shares.
- The corporation is on title and investor's name on mortgage.
- The investor gave the corporation a loan in the amount of $100K (for simplicity lets assume zero interest)
- The corporation generates net income after financing of $50K per year.
Since the above investor gave the corporation a loan, he can take out money (the corporation's net income) up to 100K without paying tax on it and claim it as loan repayment.
My question is not about tax savings but rather financing: will this legit money transfer make it more difficult for the investor to qualify for a new mortgage since he is not showing any income/T4 OR will most banks actually understand his corp. really generates income for the investor and the investor is just claiming it as loan repayment in order to legitimately not pay tax twice on it?
Alternatively, the investor can claim the 50K as income, generate a T4 and pay tax on it.
I'm just not sure throwing around $5,000 to the garbage (tax paid if T4 is generated) would really improve the investor's mortgage application significantly(?)
Thanks,
Neil
Another mortgage question from me.
Example:
- An investor purchased a property under a corporation of which he owns 100% of the shares.
- The corporation is on title and investor's name on mortgage.
- The investor gave the corporation a loan in the amount of $100K (for simplicity lets assume zero interest)
- The corporation generates net income after financing of $50K per year.
Since the above investor gave the corporation a loan, he can take out money (the corporation's net income) up to 100K without paying tax on it and claim it as loan repayment.
My question is not about tax savings but rather financing: will this legit money transfer make it more difficult for the investor to qualify for a new mortgage since he is not showing any income/T4 OR will most banks actually understand his corp. really generates income for the investor and the investor is just claiming it as loan repayment in order to legitimately not pay tax twice on it?
Alternatively, the investor can claim the 50K as income, generate a T4 and pay tax on it.
I'm just not sure throwing around $5,000 to the garbage (tax paid if T4 is generated) would really improve the investor's mortgage application significantly(?)
Thanks,
Neil