Court makes mortgage interest tax deductible

First of a series to help you ease financial burden

One of the most important financial planning steps you can take is to initiate a strategy to ease the financial burden of a house mortgage.

Finding ways to make mortgage interest tax deductible has become easier since the recent Supreme Court of Canada decision in the Singleton case, which has opened tax planning opportunities for physicians looking for a tax break on their mortgage.

Singleton withdrew $300,000 from his capital account in his law partnership to purchase a residence, which was registered in his wife's name. He then took out a $300,000 mortgage on this home, and injected the funds back into the partnership. He deducted the interest on the mortgage on the basis the borrowed money was used for the eligible purpose of funding his capital account.

The tax department challenged Singleton, arguing...