This is a multi-part message in MIME format.
---------------------- multipart/alternative attachment
QUESTION:
Hello, at what point does CCRA make the determination that a gain on the
sale of a property is a capital gain or business income. I have 6 properties
that are used as rentals, will this constitute a business? Who makes the
determination me or CCRA?
===========================================================
david ingram replies:
This is one of the hardest questions for anyone to answer.If you had the six rentals for 10 years and sold them all to invest in a diamond mine, that would be a capital gain.
On the other hand, if you bought six rentals and listed them as you bought them and they were all "flipped" in a year, that would be straight business income.
Every case is different. If you bought six rentals and intended to keep them for ever and then a great deal on an apartment building cvame along and you sold them to buy the apartment, that would be capital gains.
If you had six rentals with NO intentioon to sell, and someone came along and offered you more money than you ever dreamed of and you sold them because of the unsolicited cash offer, the CCRA might try and tax that as straight income because you sold it for an intended profit. Put another way, the purchase and sle of any item is straight income unless there is a statedintent to keep it for a long time and it was not bought with the intention of making money on the resale.
However, the courts have held that the intention to resell if the rental does not work out is not straight income.
I have written about 27 pages on the subject and you can find it at: www.centa.com - click on [Tax Guide], click on [Capital gains].
There ae some sample cases you can read to see what the judge said as well.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321
New email to [email protected]
www.centa.com www.david-ingram.com
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 & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, 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, American and Canadian and Mexican and any of the 43 states with state tax returns, etc.
Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Taxman and Tax Guru
.,
---------------------- multipart/alternative attachment
An HTML attachment was scrubbed...
URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/9fcbb02f/attachment.htm
---------------------- multipart/alternative attachment--
What's Related