Capital Gains tax free on land.
My question is: Canadian-specific
QUESTION: I am rather confused about capital gains tax. I have heard that you are allowed to make $750,000 (??) in capital gain on real estate in your lifetime, regardless of whether it is your principal residence, without triggering capital gains tax. Is this true? If so, how does one go about reporting it in one's taxes? Again, if this is true and you are a married couple, would that amount be for each person?
Thanks!
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david ingram replies:
Never heard the $750,000 amount before.
However, from Mar 1985 to February 1992, a person could make $500,000 tax free capital gains in their lifetime on any investment.
In February 1992, that privelege was cancelled for Real Estate
In February 1994. that privelege was removed for the stock market but there was a 'top-up" provision by filing for T664 (too late now).
Today the $500,000 still exists for an active farm or fishing operation or for the sale of a Canadian Controlled Private corporation which is running an active business you have been involved with for two full years. In this case, you could have a proprietorship or partnership for two years and roll it into a corporation and sell teh corporation 2 or 3 days later as long as the underlying business had been operated by you for two years.
Each individual is entitled to the $500,000 exemption.
QUESTION: I am rather confused about capital gains tax. I have heard that you are allowed to make $750,000 (??) in capital gain on real estate in your lifetime, regardless of whether it is your principal residence, without triggering capital gains tax. Is this true? If so, how does one go about reporting it in one's taxes? Again, if this is true and you are a married couple, would that amount be for each person?
Thanks!
--------------------------------------------------------------------
david ingram replies:
Never heard the $750,000 amount before.
However, from Mar 1985 to February 1992, a person could make $500,000 tax free capital gains in their lifetime on any investment.
In February 1992, that privelege was cancelled for Real Estate
In February 1994. that privelege was removed for the stock market but there was a 'top-up" provision by filing for T664 (too late now).
Today the $500,000 still exists for an active farm or fishing operation or for the sale of a Canadian Controlled Private corporation which is running an active business you have been involved with for two full years. In this case, you could have a proprietorship or partnership for two years and roll it into a corporation and sell teh corporation 2 or 3 days later as long as the underlying business had been operated by you for two years.
Each individual is entitled to the $500,000 exemption.
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