Tax Tip 7

“I sold my HOUSE, and someone said I have to declare a capital gain – is this true?”

When you sell your home, you may realize a capital gain. If the property was your principal residence for every year you owned it, you do not have to report the sale on your income tax and benefit return.

You may have a capital gain if:

• at any time while you owned the home, you rented your home or a portion of your home to a tenant
• you own another residence that is not your principal residence (ie cottage)
• your home was attained from a relative as part of an estate and was a rental property when you took ownership of the home

Capital gains can be calculated by using Form T2091 on the Canada Revenue Agency’s website. You only need to file this form IF you have a capital gain.  If you sold your home for less than what you paid for it and have a loss, you do not have to complete this form or report the sale on your tax return.

“But I heard that there is a Million dollar life-time exemption from having to claim Capital Gains!”

Yes there is – but it only applies to qualified farm or fishing properties and qualified small business corporation.

For more tax tips and tax related frequently asked questions, visit my website at www.sauvetaxservices.ca