Mother in rest home - Can they claim

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.
=======================
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