Ask MoneySense: Capital gains

Land sold to a builder is is subject to capital gains.



From the November 2012 issue of the magazine.


Q: We divided our property and gave half the land to a builder in exchange for building us a new house. Now we want to sell the house. Will we have to pay capital gains tax?


A: You won’t have to pay capital gains tax on the sale of your home, but you likely will have to pay tax on the subdivided portion of the land. According to Brian Quinlan, a chartered accountant with Campbell Lawless Professional Corporation, the land sold to the builder would be viewed as “deemed proceeds of disposition.” Your capital gain would be determined by the selling price of the land (which in your case is equal to the total cost incurred by the builder in replacing your original home) less a reasonable portion of the adjusted cost base of the land.

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2 comments on “Ask MoneySense: Capital gains

  1. Property tax and its all news are difficult to find, but you have made it easy by creating this blog.


  2. Theoretical question:

    If I pass away and hold $20,000 of capital losses in my CRA account, can these be transferred to my spouse’s CRA account for to use in the future
    to offset any future capital gains?



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