Capital gains

1.    Can you sell your principal residence and then claim your recreational property as principal residence (both Canadian)?  If so, what are the capital gains implications if you then sell your recreational property (which is now your principal residence)?

Obviously, you can't go around claiming principal residence and then selling property after property without being noticed.

2.    Is there a time frame that you need to inhabit this recreational property to allow for a sale as a principal residence?

3.    Is the entire amount of increased value (purchase price to today's worth) sheltered from CG or just the portion from the day you declare the recreational property to be your principal residence?

4.    Is there a limit of land size when claiming principal residence?  I heard there was a limit of 1 acre of principal residence being sheltered from capital gains unless you can prove the necessity of the remaining land base (i.e. access to the dwelling).

5.    What are your rates for service?  Counsel for Capital Gains management  (recreational and principal residence) so that the heirs aren't left with a tax burden that forces the sale of the recreational property.


david ingram replies:

1.   yes but not for the same time period.  See form T2091 to see how the CRA looks after this

2.   no and yes.  It can only be designated for the time that you did not designate the other house

3.   just the portion you declare.

4.   the limit is 1/2 hectare which is 1.22 acres.  If the land can NOT be subdivided because of zoning or other laws which require 4 acres for a septic field (as an example), then the whole piece might be allowed.  Goto  and read the capital gains section in the TAX GUIDE which you will find in the top left hand box  for some examples.

5.    fees are stated in the following missive.

David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.   Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada.  

This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return.

$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.  

$1,000 would be the same with one rental

$1,200 would be the same with one business no rental

$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.

$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,600 would be for two people with income from two countries

$2,800 would be all of the above and you moved in and out of the country.  

This is just a guideline for US / Canadian returns

We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.

With a Rental for $350

A Business for $350 - Rental and business likely $450

And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.  

Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.  

TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.

8891 forms are generally $50.00 to $100.00 each.  

18 RRSPs would be $900.00 - (maybe amalgamate a couple)

Capital gains (sales)  are likely $50.00 for the first and $20.00 each after that.  

Just a guideline not etched in stone.