Deferring capital gains - real estate - Only in America, Not in Canada you say. Pity! -

We have just recently sold real estate at a profit.  If we purchase another
investment property, can we defer paying capital gains?
I found reference to this for the US but not Canada.

Personal situation:
Bought bare lot in 1993.  Sold at $100,000 profit recently.  
Husband relocated to another city.  Would like to buy home to live in but
principal residence will continue as original (family not moving).
May also take in boarders/roommates - what is tax implication?

Is there a time limit to purchase another property from the sale of the lot
to quality for capital gains deference?
Is there a form that needs to be filled out?
Are there advantages to doing this, or disadvantages, or better options?

Can you guide me to website or information re Canadian tax laws in this

This is the information I found regarding US law:
Capital Gains Tax
One of the reasons people choose to use a 1031 exchange is to defer paying
capital gains tax on their business or investment real estate. Capital gains
tax is defined as the tax levied on profits from the sale of capital assets.
Section 1031 of the Internal Revenue Code provides for the deferral of
capital gains taxes with a tax-deferred exchange. A tax-deferred exchange or
a like-kind exchange is a method by which a real property owner can sell his
property and then reinvest the proceeds in ownership of like-kind property
and defer the capital gains tax.The process gives the 1031 exchanger more
buying power because the capital gains taxes are deferred. Capital gains
taxes on the sale of the property are deferred until the like-kind property
is sold at a future date. To estimate your capital gains, use our capital
gains calculator <> . This
calculator will help to determine the amount of capital gains tax due if you
were to sell your property. However, this information is not intended to
replace qualified legal and/or tax advice regarding capital gains taxes.
Each buyer should review any investment or transaction with their own legal
and/or tax counsel to determine the amount of capital gains they owe. To
qualify as a like-kind exchange and avoid capital gains taxes, property
exchanges must be done in accordance with the rules set forth in the tax
code and in the treasury regulations. In order to defer all capital gains
tax in a like-kind exchange, the real estate buyer should follow these
*        The exchange proceeds must be reinvested in the acquired property
and the acquired property must have the same or greater value. 
*        Obtain equal or greater equity in the replacement property. 
*        Obtain equal or greater debt in the replacement property or have a
reduction in debt that is offset with additional cash at closing from the
*        Receive nothing except like-kind property. 
Besides deferring capital gains tax, there are numerous other benefits of a
1031 exchange. Please visit our 1031 Exchange
<>  facts page to learn

Thank you for your consideration.
david ingram replies:

Although hinted at in the last election, the Stephen Harper government  has not made any motions to bring in a rollover for general Capital gains in Canada.

There 'are' TWO situations where a rollover is possible.

1.    The land or property is expropriated by a government authority for the common good. and / or

2.   The property is / was used by an active business.  Therefore, a car lot could sell its car lot for a profit and buy another because the property was the active business or a tool rental business could sell its building and buy another or a doctor could sell his or her stand alone medical building and buy another.  If the doctor used one office out of 25, it would not work because the rest of the building was rented and rental buildings do not qualify although they could use the percentage they used that was active. A feed lot could sell its premises and move out of town to buy another property for its feed lot.

The US 1031 rules have no place in Canada.

As for taking in boarders, you would simply fill in a T776 or a T2124 to report the income.
david ingram wrote:
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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My Home office is at:
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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. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at If you forward this message, this disclaimer must be included."
Be ALERT,  the world needs more "lerts"
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. 
This from "ask an income trusts tax and immigration expert" from or or David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention

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