Comments on: How Do I Avoid or Defer Capital Gains Tax on Investment Property in CANADA? Any Help Much Appreciated…?

By: hobbit

hobbit — Sun, 07 Mar 2010 00:47:34 +0000

OK there is a way in which you might be able to defer capital gains taxes. You might not like it though.

If you have a gain in non farm property and do not receive all the proceeds for up to 5 years, you can claim a reserve against the gain.

For example if your gain was 100,000 and the proceeds were 250,000 and you received only 50,000 this year, I believe you effectively would be taxed only on 20 percent of that gain. You might take a look at your tax situation and structure the payments in such a way to lessen the tax bite within those parameters

Check with your accountant for appropriate forms

By: CHARLES R

CHARLES R — Sun, 07 Mar 2010 00:21:37 +0000

Quizzard’s correct.

However, you might be able to lessen the impact of the sale by using some of the net proceeds of the sale to top up your RRSP.

This would have the impact of efectively lowering your income for tax purposes and reducing the amount of tax owing on the sale.

By: quizzard123

quizzard123 — Sat, 06 Mar 2010 23:50:28 +0000

Any non arms length sale has to be at market value, triggering the capital gain anyway.

There is no legal way to avoid the capital gain tax, I’m afraid. Unless you’re willing to sell it for less than it’s worth (arms length only)