Is anyone doing this? I have been looking into it, and already have a line of credit set up with my mortgage, where mortgage outstanding plus available credit is equal to 80% of property value at time of mortgage initiation so I should be good to go on that front.
How do withdrawls from your investment account affect the Smith Manoeuvre tax deductibility? If I transfer funds from my LOC into my investment account, invest it in ETFs, is there a waiting period before funds can be moved out of the investment account. What if I purchase one ETF, but withdraw from my fixed income?
I have some renos planned for the house, the money for which I have have already planned for and put aside in my taxable account since I bought the place. I plan to do these renos in the next 12 months. I have been noodling around with the idea of paying for the renos from my LOC instead of pulling out the money from investments so that the investments can continue to ride the Trump train. I really like the idea of having the interest on the LOC being tax deductible though.
It feels too good a deal to be true so I assume I am missing something. My taxable investments far exceed what I would owe on my mortgage and LOC, and I don't plan on moving any time soon, so am not worried about a real estate meltdown causing me to be underwater on the house debt.