Bequeathing property to a child and deducting interest for a real-estate purchase were among the topics raised in the latest batch of reader letters. Here’s what they wanted to know.

Q: “I am 56 and the sole owner of my house, worth $450,000. I am preparing my will and would like to know what the tax implications would be if I were to give the house to my son when I die. He is 25 and already owns a house with his spouse. Another scenario I’m considering is leaving it to my common-law spouse (who lives with me), conditional on him leaving it to my son upon his death. Can you make such a stipulation in your will?”

A: François Bernier, director (advanced planning) for Sun Life Financial, says it is possible to put such a condition in your will, if you so choose. “There are different ways of doing it: through a mechanism called substitution, through a testamentary trust, by a right of usufruct or by conceding your spouse a right of reserved use. You should consult a notary or lawyer to see which would work best for you.” If you opt to give the house to your son now or upon your death, there is no tax consequence, but he’ll need to pay capital gains on one of his two properties for the years he owned them simultaneously, Bernier said.

Q: “I am planning on buying a condo for $200,000, to be financed by a mortgage on a $400,000 income-producing property that I own. Would the interest on the mortgage be tax-deductible if I use it to buy a condo as principal residence?”

Q: “We presently own two homes, one in the suburbs that we plan to sell in the next couple of years and will declare as our principal residence. We’ll then move to the other home in the country. (It was built 15 years ago and is worth more than our other residence). What are the tax implications if we sell the country home at some point?”

A: For tax purposes, couples can only have one principal residence at a time. So appreciation of one of your properties is creating an eventual tax obligation as long as you own two of them. Ideally, the principal-residence exemption (from taxes) gets used on the house where it provides the biggest benefit. If you proceed as planned with your suburban home, the exemption will spare you from taxes when you sell, but you’ve locked in the tax obligation on the country home for those years. If the country home actually gained more value than the other house over that time frame, it might be worthwhile to retain the exemption for that property and pay the applicable taxes when you sell the other.

Paul Delean, Montreal Gazette