My question is: Canadian-specific
QUESTION: We are about to sell an investment and there will be capital gains
tax to be paid as we have made a profit. We have heard the Conservatives
might be changing things, that if you are buying another investment
property you could reinvest in that and then not be liable for taxes on the
first one. Have you heard of that?
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david ingram replies:
This is a good question although i think it is a little wishful thinking in
the short term.
Harper has no easy combination of parties to ensure a vote. The concept of
a rollover already sexists in Canadian income tax but it is only used by
active businesses when they sell the office building the business works out
of or a service station sells its land and building or in the case of
expropriation by a governmental authority.
It would be s small bit of legislation to have it apply to most real estate
deals as the US 1031 exchange does.
The 1031 exchange also allows a farmer to trade a bull for a bull or cows
for cows but not a bull for cows. The exchange must be a "like" exchange so
you cannot trade stock for a farm or a farm for stock.
You can trade a waterfront cabin for a ski chalet.
I will let you know if it happens. I deal with so many cross-border real
estate sales that it would be great if a person cold sell his or her Palm
Springs Condo and buy one in Indio and use the 1031 exchange in the US and
the same thing in Canada.
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