My question is: Canadian-specific QUESTION: myself and 2 friends bought a piece of land zoned c9 on two titles.we bought it from a company and to avoid paying the gst we started a partnership and obtained a gst number.we then rezoned the property to residential with the hope of building homes for ourselves on the land.situations changed and we have now sold half the land and are in the process of selling the other half.should the purchasers be paying gst and what taxes should we be paying on completion of the sales --------------------------------------------------------------------------- david ingram replies: If you bought it with a GST number, you have to charge GST when you sell it or absorb the GST into the sales price. Getting the GST number was likely a big mistake. If you had not got the number and paid the GST, it is quite conceivable that you were buying the lots as a group with the intention of saving money to buy them to build your own houses on. However, getting the number is a declaration to the CRA that you were buying with a business intent to resell. That means that The CRA will tax you at full rates on any profits and not allow a capital gains tax treatment since capital gains can NOT apply to inventory which is what you told the government the land purchase was. So when you prepare the profit and loss, the profits will go on line 135 as straight business income rather than line 127 as a capital gain. One advantage is that if you happened to lose money in the deal, you can write the loss off against other income and you can only write a capital loss off against capital gains. -------------------------------------- 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, I, david ingram am a regular guest on Fred Snyder of Dundee Wealth Managers' 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/> Call (604) 280-0600 to have your question answered. BC listeners can also call 1-866-778-0600. Callers to the show and questioners on this board can also attend the Thursday Night seminars on finance and making your Canadian Mortgage Interest deductible. And for those in the Vancouver area, Fred is running an infomercial for 1/2 hour every night in October on Channel 10 television at "groooaaannnn" 1 AM in the morning. It has a couple of useful concepts in it that can be recorded to really get the idea. David Ingram's US/Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists Home office at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://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 and the author and any and all non-contractual duties are expressly denied. 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