Canada Law
Ask a Canada Law Question, Get an Answer ASAP!
Connect one-on-one with {0} who will answer your question
Answered in 1 hour by:
5/5/2011
VerifiedDebra Thal (username) :
So the tenants were there for 3 years and then it was your principal residence until now, is that it?
Debra Thal (username) :
I don't suppose you had it appraised when you moved in, did you?
Customer:
Yes, the tenants were there from when we purchased in 2003 through until, we gave them notice and, we moved in 2006. No we did not have the house appraised in 2006, but, I was speaking to a local firm of appraisers recently, who told me that they would be able to assess a value in whatever month in 2006. We bought the house for $1,050,000 in 2003, it was worth about $1,600,000 in 2006 and we have sold for $2,800,000. Renovation costs amount to $300,000 of which $45,000 was spent while tenanted but not claimed as a rental expense.
Debra Thal (username) :
Basically the way it works is that you pay capital gains tax on only part of the gains.
Debra Thal (username) :
You do not have to pay on any gains from 2006 until the present because then the house was your principal residence.
Debra Thal (username) :
And you can also subtract capital improvements again pro-rated.
Debra Thal (username) :
So long as the appraising company is legitimate and can give you a report the CRA will likely accept their value.
Debra Thal (username) :
I would suggest checking with your accountant to ensure he/she agrees that whatever the company does is adequate.
Customer:
I do not understand quite how this will work. If we take a 2006 value how do we apportion selling costs? Pro-rata? In this case, I assume that the only capital costs that could be deducted would be the $45,000 spent prior to our occupation as principal residence in 2006?
Customer:
Actually the BC Assessement as at 01/07/2006 was $1,504,000. Legal fees, inspection fees and property tax on purchase amounted to $24,396. I estimate realtors' commission and legal fees on selling to be circa $100,000.
Customer:
When I spoke with Canada Revenue they told me to complete a form T2091. This arrives at a pro-rata of 7/9ths of the total gain being exempted as principal residence. This appears to give a lower captal gains tax figure payable than trying to agree a 2006 valuation.
Debra Thal (username) :
When there is a change of use of your rental property to your principal residence, you are deemed by law to have sold it and reacquired it as your principal residence.
The sale may give rise to a capital gain or a capital loss but in your case there was a gain, of course.
You could have paid the tax when you moved in but presumably you elected (under Subsection 45(3) of the Income Tax Act) to defer the reporting of the gain until you subsequently sold the property.
Debra Thal (username) :
So there was a deemed disposition when you moved in, at fair market value, and you must pay capital gains tax on the gains.
VerifiedDebra and 87 other Canada Law Specialists are ready to help you
How JustAnswer works
Describe your issueThe assistant will guide you
Chat 1:1 with a lawyerLicensed Experts are available 24/7
100% satisfaction guaranteeGet all the answers you need
Related Canada Law Questions
My son, a Philippine passport holder and a japan permanent
My son, a Philippine passport holder and a japan permanent resident visa holder is currently studying in University of British Columbia in Vancouver, Canada. He is in his 2nd year now. He went to Vancouver last September 2021. His student visa was only valid until January 2022 so he applied for an extension of his visa last November 2021 and was granted an extension last Feb. 2022. A study permit was delivered to his school dorm that time. We assumed that it was the only document he needed to stay in Canada and to enter Canada again if he will exit for vacation. He exited Canada last April 2022 and went back in August without any problem. He came back to Japan for a Christmas vacation last month but when he checked in at Narita airport last January 13, Friday to go back to Canada to continue his studies (2nd year, Winter term), he was refused to board the aircraft at the airport check in counter. The check in counter supervisor called the Canada Visa Application Center in Tokyo, we were able to talk to an officer and we were told that my son has to have a separate visa to enter Canada again. I told him that my son was able to travel back to Canada last August 2022 without any problem, just the study permit with him. He said that he doesn't know how he was able to travel that time without a separate visa. … read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
My wife, son and I have our permanent residence Visas and
My wife , son and I have our permanent residence Visas and social Insurance cards. The permanent resident visas expired in 2008. We had to leave Canada to complete our employment terms. We now wish to… read more
JJL11
Lawyer
Bachelor of Laws
1,432 satisfied customers
I have a question about the process of sponsoring my family
Hello! I have a question about the process of sponsoring my family as a Canad***** *****ving abroad. … read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
I am amazed you have people online at this hour! and I am a
Hi Pearl! I am amazed you have people online at this hour! My name is ***** ***** I am a Canadian citizen. I am in a common law relationship with an American citizen who needs to cross the border to j… read more
JJL11
Lawyer
Bachelor of Laws
1,432 satisfied customers
I have a few questions related to immigration and visas! I'm
Hi, I have a few questions related to immigration and visas! … read more
JJL11
Lawyer
Bachelor of Laws
1,432 satisfied customers
Debra, Following on our earlier conversation, please help me
Hi Debra,Following on our earlier conversation, please help me with confirming some of my understandings; My wife's PR Card will expire in March 6, 2023 and we intend to leave for Canada this time per… read more
JJL11
Lawyer
Bachelor of Laws
1,432 satisfied customers
I am a healthy 81 year old widow with a brother &family in
I am a healthy 81 year old widow with a brother &family in Vancouver. I would love to live there permanently. (I worked there for 3 years over 3o years ago). Is this possible?… read more
Law.Hut
Lawyer
Law degree (Juris Doctor)
6,458 satisfied customers
I have applied for Family Sponsorship for my mother in 2007,
I have applied for Family Sponsorship for my mother in 2007, in financial assesment form I showed my income in US and partially in Canada. Recently I havr received a notice that I'm not eligible to sp… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
Sir, My wife and I wish to visit Vancouver early in July 2011.
Sir, My wife and I wish to visit Vancouver early in July 2011. We are both UK citizens living in South Africa. We are both Canadian Pensioners. We both lived and worked in Toronto from 1966 to 1969 an… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
Hello. My name is Kevin. I am a Canada/U.S dual-citizen. i
Hello. My name is Kevin. I am a Canada/U.S dual-citizen. i have lived in the U.S for the past 16 years. My wife, of 16 years is a U.S citizen. We want to make Canada our home. We have signed a lease i… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
I live in alberta, I have rental properties, should I do UCC
I live in alberta, I have rental properties, should I do UCC on my property every tax year or should I only do it for years to take my rental income to zero or should I use it to incur a rental loss w… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
I am a Indian Citizen on a H1B visa working in New Jersey for
I am a Indian Citizen on a H1B visa working in New Jersey for the last 7 years (My green card is in progress - Labor & I140 is approved thru EB3; however I485 is not current (Priority date is Oct 2004… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
Weve a Canadian Permanent Cards since 2006 after landed with
We've a Canadian Permanent Cards since 2006 after landed with our Immigrant Visas in June/2006 at Niagara Falls,ON Port Of Entry Canada and we were allowed to go back to the U.S.A after a 3 days staye… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
Hi,I am a canadian citizen.In 2004/2005 I sponsored my wife
Hi,I am a canadian citizen.In 2004/2005 I sponsored my wife and four kids.We own rental properties and a business in Trinidad.We had a buyer for both.We left Trinidad in Aug.2005 and settled in Toront… read more
D.A.M.
Principal Attorney
Doctoral Degree
2,755 satisfied customers
My daughter has recently married in Alaberta to a Canadian
My daughter has recently married in Alaberta to a Canadian citzen from Ontario and now wishes to work in Canada and also her huasband wishes to come to the UK to work for a year or so. What are their … read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
Dear Sir, I have heard a lot about you and need your expertise
Dear Sir, I have heard a lot about you and need your expertise in the following matter. My wife does not meet the residency obligation, has expired PR card and is intending to travel to Canada on 14th… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
-I and my family of 2 kids came to Canada as a permanent immigrant
-I and my family of 2 kids came to Canada as a permanent immigrant in the year oct 2003 and Set 2004 respectively. -After 8 months of work at Mississauga I got an H1b sponsor in USA and moved to US in… read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
EEK.. So, on Sept 10 2005 moved to the US and married my husband.
EEK.. So, on Sept 10 2005 moved to the US and married my husband. Received my Green card in July 2006. On Sep 4 became a US citizen. My Condo in Toronto was rented out to a tenant as of Oct 4, 2005 - … read more
Debra
Lawyer
Doctoral Degree
146,175 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.
JustAnswer in the News:
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
What Customers are Saying:
Your Expert confirmed everything that I had been told, and didn't want to believe. Thank you for putting my mind at rest.
Canada
This has been very helpful. I'm glad to see that lawyers and sites like this exist. Thanks for your help.
Halifax, NS
Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!
Edmond, OK
My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.
Redwood City, CA
I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.
Wichita, KS
PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.
Houston, TX
Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!
Atlanta, GA
< Previous | Next >
Meet the Experts:
LawyerProfessor
Lawyer
838 satisfied customers
Experienced Litigation Lawyer in Ontario since 1999 and NY since 1997
Debra
Lawyer
146,175 satisfied customers
Lawyer
Daniel Freudman
Lawyer
2,943 satisfied customers
Lawyer
ToLawyer
Lawyer
2,434 satisfied customers
Expert
JJL11
Lawyer
1,432 satisfied customers
Licensed to Practice law in Ontario for over 25 years.
Jeremie John Martin
Lawyer
1,300 satisfied customers
I'm a bilingual attorney for the province of Quebec who goes to Court often for many clients.
Counsel Creed
Lawyer
859 satisfied customers
associate at GTA law firm
< Previous | Next >
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.
