My question is: Applicable to both US and Canada QUESTION: My sister and I are joint owners of the family home since my mother died. She lives in the US, but retains her Canadian citizenship. Since she is now retired, we will be selling the home, and I have a number of questions - 1. Need I use a realtor? What legal responsibilities will I have to look after if I handle the sale myself. 2. Is there anything she (or I) can to to minimize any taxes to her? 3. I took the capital gains partial exemption when I filled out my income tax in 96-97. How will that work upon sale? --------------------------------------------------------------------------- david ingram replies: Assuming that the house was rented and is subject to capital Gains tax, the replies would be as follows: 1. You do not need to use a realtor. There are many books on the market which you can get hold of to help you sell your house. However, A realtor will usually pay their way by ensuring that you get the top dollar for the property. Of course, the buyer's realtor is telling the buyer that they are getting the lowest price for the house. The rules are different in different provinces as to the property disclosure rules. In BC you have to give the buyer a full property disclosure statement which will detail everything that you know to be wrong with the house. If you don't disclose a problem, the buyer can come after you for repairs. 2. As a non-resident, your sister did not get the chance to capitalize any profit when your 1994 return was filed (or amended) and you filed the T664. Your sister should have been reporting the rental income by filing a Canadian return under Section 216(4) each year and then she should also have been filing a Schedule E to report the rental income on her US return. If she paid any tax to Canada, she would have or should have claimed it as a credit by filing US form 1116. 3. When you filed the T664 in 1995 for your 1994 return, the amount of elected gain found at Step 3, line 6 was recorded or should have been recorded in the CRA's computer and be available for you to claim now. When you sell the home, you will add this amount to your inherited cost and pay tax on the difference between the grossed up figure and the sale price (your half). Your sister will pay tax to Canada (and the US) on the difference between the value at your mother's death and the sale price. 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, I, david ingram am a permanent guest on Fred Snyder of Dundee Wealth Managers' 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 <http://www.600am.com/> Call (604) 280-0600 to have your question answered. BC listeners can also call 1-866-778-0600. Callers to the show and questioners on this board can also attend the Thursday Night seminars on finance and making your Canadian Mortgage Interest deductible. David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists Home office at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 9 AM to 9 PM 7 days a week (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. 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