A real estate investor in Alberta owns multiple rental properties and wants to implement a tax planning strategy. Which of the following would be most effective for minimizing current year tax liability?
Correct Answer
C) Timing the purchase of new properties near year-end to maximize deductions
Timing property purchases near year-end allows the investor to claim a full year of eligible expenses (legal fees, land transfer costs where applicable, and other acquisition costs) while potentially claiming capital cost allowance for the year. This strategy maximizes legitimate deductions in the current tax year.
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Previous Question
A real estate developer purchases land for $500,000, constructs a building for $1,200,000, and sells the completed project for $2,100,000. Assuming this is considered business income rather than capital gains, what amount is subject to income tax?
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A real estate investor owns a property that has appreciated significantly but wants to defer capital gains tax. Which strategy would be most appropriate under Canadian tax law?