Daycare house in Canada (and USA)- is any part of the

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My question is: Canadian-specific
QUESTION: My wife runs a Licensed Day Care in our house.  We have looking to sell the house and buy a home with more bedrooms to accomodate our growing family.  My wife will continue to run her Day Care but in the new home.  Does she have to pay any taxes on the money we may make from the sale of our house?  I hear something about a "clawback clause."  What is that?
Thanks in advance
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david ingram replies:
Bulletin 120R6 refers to major structural changes to a house used for business as creating a tax liability.  
Therefore the bulletin infers that the sale of a duplex or a triplex will be taxable because there are separate entrances, etc.
The Bulletin also infers that the rental of a couple of rooms to students or the use of the home as an office will not trigger a capital gain.  HOWEVER, the Bulletin is only a bulletin and an "interpretation" - It is NOT law.
Law is  Section 54(g) of the Income Tax, which allows a house and up to a 1/2 hectare to be sold capital gains tax free if used as your principal residence.
And the sale of a triplex has been ruled tax free in the Fedel Saccomono case. 
In my opinion, the Saccomano case makes you tax free on the sale of your house.  In his case, he rented out two thirds of a  triplex.  The judge ruled that since he had bought the house to live in and the suites were a mortgage helper, the whole triplex was capital gains tax free.
Do NOT claim depreciation or CCA.  Glad to help you with the returns by the way. 
To repeat, 
In 1986, Fedel Saccomanno won the sale of his home as a tax free capital gain as his principal residence. He had bought a triplex with two units rented out, and lived in the third unit with his wife on weekends when he was not teaching at the University of Waterloo. When he did not get tenure at Waterloo, and sold the property, DNR tried to tax two-thirds of the profits. Judge Taylor ruled that the entire triplex was tax free, giving credence to my claim in my Investment Guide. In the Investment Guide, I suggest that people with duplexes and triplexes should claim the whole building tax free in spite of the fact that Bulletins IT 120R2 and R3 stated that half a duplex and two thirds of a triplex would be taxable. 
NOTE that in the USA, claiming the share of the house as a daycare deduction DOES  - absolutely no exceptions - make the house taxable  In my opinion, with 100% of taxes and mortgage interest deductible already, most (if not all) US taxpayers should NOT be dedcuting an office or studio, etc in their home.
Answers to this and other similar  questions can be obtained free on Air every Sunday morning.
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