Canadian selling rental house - capital gain and at

My question is: Canadian-specific
We are acquiring income producing properties and are now at the point where
we may consider flipping one of the first purchased.  The capital gains
issue is our primary concern.  With a purchase price of 270K and selling of
450K what are the tax implications?  More specifically, how is the gain
applied against our income?  Is it tacked on to the gross income and then
taxed according to our tax bracket?
david ingram replies:
I am tied up in a five day divorce trial and have run out of time to answer
any of these specifically.  If you go to, click on tax guide
on the left and then on capital gains you will find a lot of information on
Canadian Taxation of Capital Gains.  Note that only 50% of capital gains is
taxable again.
And, if you have only held the property for a short time and are "flipping"
it as you suggest, the gain is taxed at straight income tax rates on top of
your other income.  "Flipped houses are never treated as capital gains."
The following questions should help you.
QUESTION: I have owned a rental property for 8 years and would like to sell
it to a friend.  Is there any way that I can structure the sale so that I
spread the capital gain out over three years?
david ingram replies:
Canada will allow you to set up a reserve over a period of up to five years.
You must carry the mortgage to do this.
If you carry a mortgage, the US will allow you to spread the profit over the
life of the mortgage.
If you are paid out early, the capital gain is taxable when you get it in
both countries.
My question is: Canadian-specific
QUESTION: If I bought and moved into a house and decide 6 months later that
I don't like it and sell that house to move elsewhere do I attract capital
gains on the sale of my home?
david ingram replies:
And how high is up?
If you bought a house to resell any profit is taxable at ordinary income
rates unless you can get it into another category.
If you bought a house or cabin to rent or use as a second home and decide
ten years later to sell it for some reason or other, it is likely a capital
If you buy a house and decide to sell it in six months, you can expect that
the CRA "might" try and tax you at full rates unless you can show that the
house was truly your principal residence and that you sold it for reasons
other than making a profit.
reasons might be:
1.    You lost your job
2.    The school your child goes to is just not any good
3.    You cannot stand your neighbour
4.    You get divorced
5.    you are transferred to another city
6.    You are pregnant and need a bigger house
7.    My favourite was a couple who ended up in a battle with organized
druggies and sold out in fear of their lives.
However, if you bought a fixer upper and fix it up and sell it and buy
another fixer upper around the corner and your kids keep on going to the
same school and you shop at the same stores and catch the same bus, etc.,
you will be paying straight tax.
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