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Legal Ease
Legal Ease, Lawyer
Category: Canada Law
Satisfied Customers: 86286
Experience:  Lawyer
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Hi, my parents bought a triplex in 1995 and at the time theywere

Customer Question

Hi, my parents bought a triplex in 1995 and at the time theywere advised to not put my name or my sister's name on the deed even though all mortgage, utilities, taxes and insurance were split three ways but not on paper. I live in the top apartment, my parents live in the middle apartment and my sister lives in the basement apartment. There are no other siblings in the family. I was recently told that when my sister and I inherit the triplex, there will be capital gains to be paid with the estate upon both my parent's death. Is this true and how can we calculate how much that will be? We paid $164 000 for it. Is there any way around having to pay for our only residence once my parents die?
Submitted: 1 year ago.
Category: Canada Law
Expert:  Legal Ease replied 1 year ago.
Thank you for your question.

Before I begin I want to explain a bit about how the site works.

It may be that I will find that I need to gather further information from you. As well, it's quite possible that you may feel the need to ask me additional questions for further clarification.Please do not worry that you will be charged additionally if I ask you questions or if you need to ask me questions. That is not at all how the site works.

As well, please understand that as a careful lawyer I will always give you an honest answer even if the answer is sometimes not what you were hoping for.

Finally, as we go through the process please do not feel rushed if I ask you a question. You are always free to take your time to gather more information before you post back. As well, please understand that even after you rate me the post will not lock and you could always come back for further clarification if you think of something a bit later on down the road.

With the help of an experienced accountant you may be able to avoid paying any capital gains tax. The reason why is that based on your facts and the fact that you each live in part of the triplex and each pay for all the mortgage payments etc it is possible that you can prove to the CRA that your parents were holding title in trust for both of you.

That would be a great outcome because then as this is both of your principal residences as well as your parents no capital gains tax would have to be paid.

Does that clarify the situation?
Legal Ease, Lawyer
Category: Canada Law
Satisfied Customers: 86286
Experience: Lawyer
Legal Ease and 2 other Canada Law Specialists are ready to help you
Customer: replied 1 year ago.

That would be the best outcome for sure.


At this point, I'm trying to figure out how much of capital gains would there be. I was told it would be on only 2 apartments, not the third since it was their primary residence. Should I seek out an accountant for this answer?

Expert:  Legal Ease replied 1 year ago.
Yes it would be 2/3s of the regular gain but I don't think you will have to pay so long as the filing is done correctly.

You don't need an accountant to answer as the answer is clear.

If you can prove they were holding title in trust for the two of you there is no tax.

If not then the regular capital gain would be reduced by 1/3 as your parent's 1/3 would be exempt.
Customer: replied 1 year ago.

I would not know how to prove they were holding the title in trust for us.


 

Expert:  Legal Ease replied 1 year ago.
That's where the accountant comes in to help you but essentially you prove that you are an owner in fact though not in name.

And proving you made mortgage payments, and paid property taxes is likely all it takes. Tenants pay utilities but not mortgage payments.

Kids can live for free in their parents home but then they don't make mortgage payments.

Do you see what I mean.

What you paid is going to save you. As the fact is that you are a bona fide owner.
Customer: replied 1 year ago.

I see what you mean, but there's no proof we paid. We handed our dad our third of the required payment be it mortgage, taxes, insurance, sometimes by cheque but mostly in cash.


 

Expert:  Legal Ease replied 1 year ago.
Then if necessary you will each swear Affidavits.
Customer: replied 1 year ago.

Oh ok thank you!

Expert:  Legal Ease replied 1 year ago.
Thanks very much for the rating.

Please take the time to participate in the customer satisfaction survey as that will go into my record with the site.You will be sent an email with the survey in a couple of days.

And feel free to keep my name in case you need me again down the road. You can always put my name into the subject line the next time you post so that your question will stand out for me and I will answer it just as soon as I can.

Thanks and take good care!

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