Subject: Inherited real-estate
Expert: taxman at centa.com
Date: Sunday July 30, 2006
Time: 02:47 PM -0700
QUESTION:
I live and work in the US as a Green Card holder. I inherited from my
Canadian citizen and resident father 50% of his personal Montreal residence
about a year back. Since the filing his Canadian estate statement and taxes
last year, the property price has dropped based on the sale that will take
place next month.
Is there anything special that I have to do prior to the sale transaction
(to be executed at the Notary in Montreal) date in September so that I can
get the full 50% of the net proceeds with no withholdings (since there was a
loss between the inheritance declared value and the sale price)?
Thanks very much for your help.
-------------------------------------------------------
david ingram replies:
Yes, you will need to file a form T2062 within 10 days of the sale. The
penalty is a minimum of $100.00 and maximum of $2,500 for being late at
$25.00 a day.
This form will require a copy of the will, a copy of the appraisal that set
the value used for your father's estate and a copy of the statement of
adjustments for the sale.
Be aware that in the circumstances you describe, there is a very good chance
that the CRA will challenge the value for the estate because of the general
perception that all real estate has gone up in the last year in Canada. (I
know it has not but the general perception is that it has). In fact, it is
common for realtors to give a higher price as an estimate to get the
listing. It likely did not go down but did not go up either because of the
slowdown and rising interest rates.
You might want to get another appraisal for its value at the time of your
father's death from the realtor who just sold it for you and your sibling or
the other inheritor(s).
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