I just felt to compelled to share this great advice I found in February’s Moneysense magazine.
It has to deal with a couple that was looking to sell their home and cottage to purchase a new home on the water.
With the CRA, there is no way to get out of paying capital gains tax. You have one principal residence exemption for tax purposes that you can use either for your home or your cottage
Deb MacPherson,a partner at KPMG, explained that in order to minimize the tax impact, you should designate the property with the higher annual accrued gain. You can also reduce the gain by making sure that improvements to the property and costs related to its sale, such as legal and real estate fees, are added to your adjusted cost base.
“Be sure to keep your receipts for improvements in case you are audited.”
If you would like more info on this, please contact me, I can put you in contact with an excellent accountant and/or a financial planner.
