QUESTION: Hi david,
I am thinking of renting out my basement suite. The suite is around 40% of
the whole house area. Will it affect my principl residence status and can I
claim 40% all expenses ?
===================================================
david ingram replies:
Although Bulletin IT120R6 suggests that the tax office will tax you on 40%
of the gain from the sale of the house if you deduct 40% of the expenses,
the Fedel Sacomanno case suggests that you can sell a Triplex and I have
seen six plexes sold without capital gains tax. The reason is that the act
is clear that a house and 1.22 (1/2 hectare) acres are tax free. The land
goes up, the house goes down or up very little.
Goto www.centa.com and read the capital gains section in the TAX GUIDE which
you will find in the top left hand box.
The Sacomanno (sp?) case is buried in the middle.
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