My question is: Canadian-specific QUESTION: My parents own a cabin in BC which has increased in value substantially since they purchased it. My father is concerned that, when he and my mother pass, the taxes will overwheml my sisters and I, and feel the best thing to do is sell it now to avoid the problem. It is not their principle residence. Is there a way that we can keep this treasure in our family without being handed a big tax bill? Thanks, and keep up the great work! --------------------------------------------------------------------------- david ingram replies: 1 You could freeze the tax bill by transferring the property to the kidlets now. 2 You could start a tax account now where everyone involve kicks in $25 or $50 a month to have the money to pay the tax in the future 3. You could buy a joint or last survivor life insurance policy on your parents so that upon their demise, you can leave the life insurance to the estate to pay the taxes. The kids should pay the premiums on the life insurance policy. or 4 Wait until they pass, figure out the tax and put a mortgage on the property to pay the tax and then the inheritors pay the mortgage. For instance, if they (your parents) bought it for $25,000 and today it is worth $225,000, the taxable part would be $100,000 which might add $35,000 to their final tax return. This is not a bad price for a $225,000 vacation home. A mortgage for $35,000 would have payments of less than $300 a month and surely, the inheritors could manage that if they wanted to keep it in the family. If it has gone to $425,000, there would be a $70 to 80,000 mortgage necessary. 5. Start that savings account now and when it gets to that time, you can to it half cash and half mortgage. ------- 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. 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