QUESTION: My mother owns a condo unit in BC. The title on the mortgage includes her, myself( daughter) and granddaughter. All expenses eg mortgage, utilities etc are paid from her accounts. AS she has now been placed in a senior's home the property is rented. Can we still claim the additional tax grant on her behalf ( she is 94 years) whilst the condo is being rented. I heard that there was a 4 year "grace" period?? --------------------------- david ingram replies: The answer is NO. Mother has to live in the property. The 4 year exemption applies to capital gains tax. If you make an election under section 45(2) to continue to claim the house as a personal residence even though she does not live in it, you get to claim those years on form T2091 (designation of a personal residence) when it is sold. The following prior question and answer will help. ====================================== From: taxman at centa.com [mailto:taxman at centa.com] Sent: Saturday, April 22, 2006 7:23 PM Subject: Section 45(2) claiming a rental former home tax free - form T2091 - international non-resident cross border income tax help assistance expert preparation & immigration consultant david ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce My question is: Canadian-specific QUESTION: My partner owns a condo in Port Moody, British Columbia which she bought as her principle residence. She moved into the suite in November, 2004 and moved out in June, 2005. She left the property so we could be together, and moved to Prince George to live with me. We have rented a home in Prince George since we have been living together. The property is currently being rented, but she is considering selling it. Since she did not leave her property for profit, but for unforseen circumstances, is she subject to capital gains tax? --------------------------------------------------------------------------- david ingram replies: She has to elect to declare it her principal residence even if she did not live in it. With her 2005 tax return, she has to report the income and expenses for the rental on schedule T776. She should also attach a declaration that states: I hereby elect under section 45(2) of the Canadian Income Tax Act to declare the residence at _________________________________________ __________________________________________ _____________________________________________ to be my principal residence even though I do not ordinarily inhabit it. This declaration is good for 4 years with a voluntary decision to rent out. If the decision to rent is necessary because of a job transfer, the election is valid for the duration of the job transfer. When sold later the taxable portion (if any) is calculated by filling in form T2091. ======================= David Ingram's US / Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists My Home office is at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation in connection with personal or business affairs such as at www.centa.com <http://www.centa.com> . If you forward this message, this disclaimer must be included." Be ALERT, the world needs more "lerts" international non-resident cross border income tax help assistance expert preparation & immigration consultant david ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants This from "ask an income tax and immigration expert" from www.centa.com <http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or www.featureweb.com <http://www.featureweb.com/> . 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