My_question_is: Canadian-specific Subject: tax status of a persons house who has had to move into a nursing home. Expert: taxman at centa.com Date: Thursday November 18, 2004 Time: 08:58 AM -0800 QUESTION: My wife's mother had to be placed in a nursing home about two years ago. She has not sold her house and her husband has predeceased her. Her house has been rented out to offset some of the cost of the nursing home. The specific questions are: How long can she rent it out and still consider the property her principal residence? She has been declaring the rental income on her income tax returns. Are there any implications or suggestions re: paying of these taxes or is it done the same way a person would treat a bonafide income property? Thanks for you help. Hope you are doing well personally. Regards, LXXXXX -------------------------------------------- david ingram replies: Doing fine. $4,860,000 bankruptcy now over and I should have the divorce over at end of January. I am likely the luckiest guy in North Vancouver. Back to your question. The house can be rented for 4 years officially and because of the way that form T2091 reads, you actually get 5 years. If the rental had been the result of a job transfer, there is no four year limitation. The form and worksheet are at: form http://www.cra-arc.gc.ca/E/pbg/tf/t2091_ind/t2091_ind-03e.pdf The worksheet is at: http://www.cra-arc.gc.ca/E/pbg/tf/t2091_ind_-ws/t2091_ind_ws-03e.pdf To take advantage of form T2091, you are supposed to have made an election under Section 45(2). There is no "form" for this. Simply attach a note to the tax return stating: "I hereby elect to treat (the address) as my personal residence even though I do not ordinarily inhabit the residence. If you did not do this, then make sure you attach it to the 2004 return form T776. When you do this, make the statement: "I hereby elect to treat this residence as my personal residence for the years 2002, 2003 and 2004. Of course, you would start with the first year of rental. I have never had the CRA turn down a late election made in good faith. Filing form T776 to report the rent on a T1 General tax return is the only way to go. Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth Management and I, David Ingram will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com <http://www.600am.com/> Local calls are taken at (604) 280-0600 and Long Distance calls are taken at 1( 866) 778-0600 ========================================= This from "ask an income tax and immigration expert" from www.centa.com <http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or www.featureweb.com <http://www.featureweb.com/> . 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, the 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 and Houston Texas Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax and ImmigrationWizard Income Tax and Immigration Guru Income Tax and Immigration Consultant Income Tax and Immigration Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer consultant expatriate anti money laundering money seasoning FINTRAC E677 E667 4789 4790 TDF-90 Reporting $10,000 cross border transactions ========================= Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Garland, 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. 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