10
October 2013
Annie Boivin
Hard Cash
Fiscaliste Tax and financial planner
[email protected]
Nursing home and principal
Residence don’t mix
Gains on the sale of a principal residence are not necessarily exempt from tax. The
tax authorities can use in certain circumstances, such as when owner leaves home
To take advantage of the principal residence exemption and not have to
pay tax on the sale of his house, six criteria must be met, and that, for all
the years that we have owned the residence. One of these criteria is that
the house in question must be settled by the owner or his spouse (or
former spouse), or her children, whether minor or major.
If a person who has no spouse leaves his residence to move into a
nursing home, it loses the right to claim the principal residence
exemption for the years in which she did not live in her house because
that she need of care and must live in a nursing home.
If the house is uninhabited part of the profit from the sale will be the
imposable. If, for the example, the price paid is 75,000 dollars and is sold
200,000 dollars home, so that there is no year in which the
residence is uninhabited. A portion of the profit of $ 125 000 will
be taxable. The sand impose part depend on the number of years of
ownership (say 25) and the number of years it has been occupied (say
five years). In this case, it is 20,000 dollars that would be taxable as
capital gain, simply because the person no longer lived in his home
because she lived in a nursing home. So you have to sell a home quickly
of the person who will move into a nursing home.
Another solution to avoid tax on the disposition of the
house is that it is inhabited by a child of either owned or
rented.
When a house exchange vocation and evolves from a
residence occupied than rented residence, it is possible to
enjoy a grace period of up to four years, you must enclose
a letter with its tax return for the year which the house will
be changed status.
Responding to taxation, it is still necessary that the person
admitted to a nursing home is able to sign legal papers that
allow the sale or rental of his house! Failing to have a
power of attorney and a mandate in case of incapacity
allowing others to make such decisions, it is quite possible
that the house remains vacant and part of the sale of the
principal residence is then taxed at its disposal.
Rents in the nursing home
In a nursing home, you do not pay rent, but rather a contribution which includes room and board.
The types of assets held, value, income and marital status of adults hosted affect the amount of the
monthly contribution for which an exemption or reduction may be requested.
Owning a home or having it sold and to hold an investment representing the profit from the sale
of the house does not change the amount of the contribution requested.
Marital status is more important than the type of goods regarding the amount of the contribution
required in nursing homes. The record of a common-law partner will be treated like a single, and
only take into account the assets and income of the person accommodated, excluding property and
income of the spouse who would have been considered in the case a married couple.
Photos : maude chauvin (annie boivin), guide se loger (chsld).
to move into a nursing home.