QUESTION:
I live in Canada and have a condo in Florida. My mother died last year. I
was living in the Candian house bought by my mother's funds, but the house
was put just in my name because my mother had Alzheimer's disease and my
lawyer said that she couldn't competently sign anything. I have two
brother's who have an equal share in the house because her will divided
everything 3 ways. I have 2 questions. Because the house was not put jointly
in my mother's name and mine, is the house considered a gift and therefore
taxable to us all now? One of my brother's wants to exchange his 1/3 share
for ownership in my Florida condo. Is there any pitfalls in doing from a tax
or legal standpoint in both countries?
Thank you very much.
-------------------------------------------------------
david ingram replies:
It sounds as if the house was your mother's and you were the bare trustee of
the house. If so, the house was hers and tax free to the three of you at
death.
Your trading the Florida Condo for a third of the house is another problem.
For Canadian purposes, the condo can be considered your principal residence
if you did not own another home which you did not if the house was held in
your name in trust for your mother.
However unless you lived in the Florida Condo for 2 full years
(interruptions are okay) out of the last five and are a US citizen or had
residence status in the US, the Florida Condo "WILL" be taxable when you
exchange it with your brother.
Sorry I do not have more time to explore the situation.
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