Just wonder if anyone can comment on an investment idea that's been put before me. It sounds very intriguing, but I'm not sure about either the practicalities or legalities of it.
The proposed scenario is as follows.
1. Investor buys income property for cash.
2. Title is registered in a corporation formed for the purpose (i.e. instead of in the investor's name).
3. Company collects rents, pays expenses, and ends up with a net operating income.
4. Pays the net amount (or at least some portion of it) to the investor as "a return of capital"
5. Investor does not have to report the money as earned income. Rather it's simply a portion of capital being returned to him.

AOK?

Duncan

PS. I'm talking Canada here. The IRS may take a different view, but I'm simply concerned with how Revenue Canada would look at things.

You need to be asking this of your CPA.

Much depends on the entity in which your operating and how your operating within that entity.

I personally like the LLC taxed as an S-Corp. I have both and use them according to how and what type transaction I'm dealing with. Properties are Land Trust under one of the other entities and ownership is in "Personality" not as real estate. Many tax advantages and asset protection advantages to this process but you need to have your own CPA walk you through the details.... if you can find one who actually understands how it is done. It is not a well followed area of the field but if you find one, he is golden, and will pay for himself/ herself in short order.

Hello Canadian. I bet you have heard of my company. Not many here in the states have.

Your question... Better pay someone for the right information. There is so much money involved you better find a fact rather than an opinion or educated advice.

I prepare taxes on the side but am no CPA. Realty Check has some good idea's so I owuld look into how they work under your government.