Rental Suite in Canada - is the

My question is: Canadian-specific
QUESTION: I have a home(duplex) bought in 1969 for $18,000 in Ottawa
Ontario. It is our main residence that we live in and have not rented out
the upper part for a year and a half and used it ourselves. we can sell the
house for a considerable profit from its original price. Do we have to pay
Capital Gains tax or can we avoid it because we are using the entire
property ourselves. By thye way the property only has one address it is
originally a single home that was converted.  Thank You
david ingram replies:
If it was taxable, you would have owed tax when you took over the area under
the deemed disposal with change of use from a business to personal use.
In my opinion, it is not taxable because of the following:
taxman at Please see bottom of message if you wish to unsubscribe.
My question is: US-specific
QUESTION: My wife and I are going to sell our triplex. We are planning on
purchasing a single family home. We live in the back unit and it has been
our primary residence for 4 years. We rent out the first 2 units in the
front. Will we be taxed on our profit?
david ingram replies:
The policy of the tax department would be to tell you it is taxable.  The
judge in the Fedel Saccomanno case ruled that his triplex was tax free. I am
giving you my answer in a similar situation.
QUESTION: I am about to sell a property I purchased in 1998. It is my
principal residence but 80% of the space has been rented to residential
tenants. I have consistently claimed 80% the expenses against the rental
In order to qualify for financing the property must be upgraded - based on a
report commissioned by the local bank when I purchased the property. The
bank now also requires foundation certification to be in place in order to
approve a mortgage. The cost of these upgrades will be about $80000. Can I
deduct that sum from the capital gain which will accrue on the sale of the
house?   This sum exceeds the net income I expect to have this year.
A second question regarding the above expenses - if the house does not sell
this year can I deduct them from capital gains realised when I do sell the
Thank you in advance for your response. Your expert opinion is much
david ingram replies:
Unless you have been depreciating the building the house is not taxable in
my opinion.
The following tax case speaks to the matter.
In 1986, Fedel Saccomanno won the sale of his home as a tax free capital
gain as his principal residence. He had bought a triplex with two units
rented out, and lived in the third unit with his wife on weekends when he
was not teaching at the University of Waterloo. When he did not get tenure
at Waterloo, and sold the property, DNR tried to tax two-thirds of the
profits. Judge Taylor ruled that the entire triplex was tax free, giving
credence to my claim in my Investment Guide. In the Investment Guide, I
suggest that people with duplexes and triplexes should claim the whole
building tax free in spite of the fact that Bulletins IT 120R2 and R3 stated
that half a duplex and two thirds of a triplex would be taxable.
David Ingram's US/Canada Services
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Disclaimer:  This question has been answered without detailed information or
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