Capitol Gains on inherited house in Canada (sic)

QUESTION:

My mother had a trust deed done so that when she passed away, I inherited her house. I didn't live there. Her and I received some money in 2006 before she died for an option to purchase. Do I have to claim this as capitol gains? She passed away in June 2006. I sold the home in March 2007. Will I have to pay capitol gains on it next year? I already pay a mortgage on property I bought last July 2006.
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David's reply:

If you own and live in another house, and mother's house was not rented out after her death, you have a choice of claiming mother's house tax free for the time from her death until you sold it or your own house tax free for the same time period.

It is likely easier to claim your own tax free because after paying selling costs, etc., there is not likely any gain on mother's house  particularly if there was an option to purchase price established befoe her death.




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