During a mortgage application, a client asks a mortgage agent for tax advice related to claiming rental income from a potential investment property. How should the mortgage agent respond?

Question: During a mortgage application, a client asks a mortgage agent for tax advice related to claiming rental income from a potential investment property. How should the mortgage agent respond?

Answer options: ✅ Politely decline to provide specific tax advice and recommend the client consult a qualified tax professional.

• Provide general information based on common tax practices for investment properties in Canada.
• Refer the client to an accountant they frequently work with, providing the accountant's contact information.
• Explain different tax implications of rental income based on their understanding of Canadian tax law.

Correct answer: Politely decline to provide specific tax advice and recommend the client consult a qualified tax professional.

Explanation: Mortgage agents are not licensed tax professionals and must not provide tax advice. Their role is limited to mortgage brokering, and providing advice outside their expertise can lead to liabilities and is a breach of professional conduct, as per FSRA guidelines.