Canada- Capital Gains, 2nd Home

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Subject Author Date Canada- Capital Gains, 2nd Home Andrew Dude 07-21-2009  Re: Canada- Capital Gains, 2nd Home parrisbraeside@yahoo.ca 07-22-2009  Re: Canada- Capital Gains, 2nd Home Diogenes 07-22-2009  Re: Canada- Capital Gains, 2nd Home parrisbraeside@yahoo.ca 07-23-2009  Re: Canada- Capital Gains, 2nd Home Diogenes 07-26-2009  Re: Canada- Capital Gains, 2nd Home Drew Edmundson 07-23-2009
Posted by Andrew Dude on July 21, 2009, 10:59 am Please log in for more thread options Hello, My first time using the site so thanks for any help I get. I live in Canada and own a second home. Since owning the property the value has grown considerably. I am looking to pass the property down to my son and try to avoid, or at least minimize the capital gains that either of us would be responsible for. Someone suggested there is a way to gift properties but am I still then responsible for a capital gain tax? Thanks, TMT -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by parrisbraeside@yahoo.ca on July 22, 2009, 6:15 am Please log in for more thread options > Hello, > > My first time using the site so thanks for any help I get. > > I live in Canada and own a second home.  Since owning the property the > value has grown considerably.  I am looking to pass the property down > to my son and try to avoid, or at least minimize the capital gains > that either of us would be responsible for.  Someone suggested there > is a way to gift properties but am I still then responsible for a > capital gain tax? > > Thanks, > TMT This forum typically handles US taxes, not Canada. However, I prepare Canadian and US returns. Your gift to a child will result in a deemed disposition of the property and trigger capital gains tax. However, it is possible to evaluate which of the two properties was a principal residence. Given that you mention son, you will also need to view the situation with respect to your spouse as each household is permitted only one principal residence. The situation also changes if your son is under or over the age of 18. The above answer is general in nature and may not necessarily be appropriate to your particular situation. Professional assistance is suggested. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Diogenes on July 22, 2009, 10:22 am Please log in for more thread options > Hello, > > My first time using the site so thanks for any help I get. > > I live in Canada and own a second home. Since owning the property the > value has grown considerably. I am looking to pass the property down > to my son and try to avoid, or at least minimize the capital gains > that either of us would be responsible for. Someone suggested there > is a way to gift properties but am I still then responsible for a > capital gain tax? > > Thanks, > TMT > ------ I don't know about Canada. In the US, you can give the property subject to a gift tax (if it is large enough) or leave it for the heirs who inherit it at the fair market value which avoids a lot of potential capital gains if they sell it. There is an Estate tax if the estate is large enough. Canadian law is probably a lot different but there may be some similarity. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by parrisbraeside@yahoo.ca on July 23, 2009, 6:55 am Please log in for more thread options > > ------ > I don't know about Canada.  In the US, you can give the property subject to > a gift tax (if it is large enough) or leave it for the heirs who inherit it > at the fair market value which avoids a lot of potential capital gains if > they sell it.  There is an Estate tax if the estate is large enough. > Canadian law is probably a lot different but there may be some similarity. None of those apply in Canada. Canada does not have a gift tax or estate tax. Inheritance occurs with a deemed disposition which means capital gain tax occurs. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Diogenes on July 26, 2009, 6:35 pm Please log in for more thread options >> >> ------ >> I don't know about Canada. In the US, you can give the property subject >> to >> a gift tax (if it is large enough) or leave it for the heirs who inherit >> it >> at the fair market value which avoids a lot of potential capital gains if >> they sell it. There is an Estate tax if the estate is large enough. >> Canadian law is probably a lot different but there may be some >> similarity. > > None of those apply in Canada. Canada does not have a gift tax or > estate tax. Inheritance occurs with a deemed disposition which means > capital gain tax occurs. > ==== Tim knows more about it than I do. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Questions re treatment of long term capital gains on home sale July 19, 2008, 1:47 pm Short Term Capital Gains and Long Term Capital Losses January 13, 2007, 2:12 am Capital Gains October 30, 2007, 11:47 pm Capital Gains=0 January 18, 2008, 7:37 pm Capital Gains October 7, 2008, 6:10 pm Capital gains - just want to be sure i have it right January 8, 2009, 10:40 pm Capital Gains February 3, 2009, 9:11 pm Alt Min Tax from Capital Gains March 15, 2009, 1:43 pm Capital gains - Now or later October 28, 2009, 10:34 am capital gains questions March 7, 2007, 4:29 am