Ask a cross-border International real estate rental
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expert - David Ingram 's CE-NTA Services in North
Vancouver BC Canada on It's Your Money CKBD AM600 Fred
Snyder's Radio Show
-----Original Message-----
From: William Murdock [mailto:murdock5492 at shaw.ca]
Sent: Monday, December 13, 2004 9:15 AM
To: taxman at centa.com
Subject: Capital Gains
In 1951 my mother-in-law was given a recreational
property in Alberta. It has increased about $ 135,000
in value. In 1994 mother put the property in joint
tenancy with one of two daughters. When mother passes
(soon), I understand she is deemed to have sold the
property to her daughter for full market value. Can
your office help me with the capital gains tax
preparation for mother's estate? Thanks.
=======================
david ingram replies:
There are several possibilities for dealing with this
and in particular, three distinct valuation days when
the property's Adjusted Cost Base for capital gains tax
purposes
1. There was no capital gains tax until Jan 1, 1972 on
recreational property - Therefore, in any case, there
is no tax on the value from 1951 to 1972.
2. If you parents had a recreational property and a
home in town somewhere, there is no tax on the
recreational property until Jan 1, 1982.
3. From 1985 until Feb 25, 1992, up to $100,000 of
capital gains was tax free. On Feb 22, 1994 this was
cancelled but anyone who had an unrealized (it had not
been sold) capital gain was allowed to "gross up" or
"top up" the value of their property by pretending that
they had sold the property and calculating the capital
gain and exempting it on form T664.
Since your mother transferred the property to your
sister in 1994, I would presume that this form was
filled out for the half she did not give away and she
claimed the part that she did give away tax free when
filing her 1994 tax return in April, 1995.
The answer to your question is that my office is well
qualified and set up to handle the tax returns on the
sale of the property. Just to show off a little and to
answer the same question for those Winnipeggers who
have a place at Bemidji Minnesota or the Vancouverites
with a place in Sudden Valley or Point Roberts and the
Montrealers or Haligonians with a place in Florida,
there is another valuation date that occurs if the
property is in the United States.
Until Jan 1, 1985, there was no capital gains tax
imposed upon a Canadian with US property. Therefore,
if this property was in California or Washington or
Florida or Texas, we would be looking at yet another
Valuation day.
And to give credit where credit is due, Doug Lentz, a
CPA in Bellingham is the "ONLY" US based CPA I have
ever seen get this right. Heaven forbid, you should
wander into a tax preparation office in Scottsdale or
Fort Lauderdale or Palm Springs. The returns are just
about "always wrong"
And they say Income Tax Preparation is boring!
========================
Answers to this and other similar questions can be
obtained free on Air every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred
Snyder of Dundee Wealth Management and I, David Ingram
will be hosting an INFOMERCIAL but LIVE talk show
called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to
listen on the internet at
www.600AM.com
Local calls are taken at (604) 280-0600 and Long
Distance calls are taken at 1( 866) 778-0600
I do not know how far the LD line reaches.
=========================================
This from "ask an income tax and immigration expert"
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