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Email this10:27 am
March 19, 2017
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I am stumped! I read this article...
https://www.ctvnews.ca/toronto.....same-year/
The parents sold their home and made the cottage the Principal residence for 5 years, yet "Revenue Canada still wanted a portion of the capital gains of that property from the time they owned it from 1998 to 2019."
How is this possible if it was their sole principal residence?
Many thanks!
10:34 am
March 14, 2023
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Maybe because the cottage wasn't the principal residence during those years? The past capital gain isn't eliminated by making the property a principal residence.
3:58 pm
November 18, 2017
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Yes. One must still pay tax on the capital gain when not sheltered. Normal.
RetirEd
4:09 pm
April 27, 2017
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Badly written article. Comes with poor advice and the brother/sister pair came across as completely unreasonable: “mum&dad died young but the real problem here is that I had to pay tax on my fallout”.
4:42 pm
September 11, 2013
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No sure what the point of the article, or the kids' position, is. There's nothing unusual here except the kids are mad that there are taxes on their parents' estates, they seem to think they should inherit everything without the estate first paying their parents' final tax obligations.
5:48 pm
April 6, 2013
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The kids misunderstood how the principal residence exemption works.
Each year after 1981, only one property can be designated the principal residence. A home or cottage is 100% exempt only if, for the years owned, it was not designated the principal residence for at most one of the years owned. Otherwise, the exemption is prorated. See form T2091IND.
One can't exempt 100% of the capital gains for multiple properties by spacing out the sales of each property and designating each as the principal residence the last few years before each sale. 
6:32 am
January 29, 2026
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Daughter hit with $660,000 tax bill when both parents died in same year. Parents had thought to leave some fortune behind, but inevitably some financial distress as well.
However, it is the countless sacrifices made by Canadians like above to enable the PM to arrive in better shape and collaborate with the world.
7:20 am
April 27, 2017
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Newton said
Daughter hit with $660,000 tax bill when both parents died in same year. Parents had thought to leave some fortune behind, but inevitably some financial distress as well.However, it is the countless sacrifices made by Canadians like above to enable the PM to arrive in better shape and collaborate with the world.
First of all, nothing’s wrong with RRSPs and cottages being taxed on death. What's unfair and inequitable is that the primary residence isn’t taxed. This shouldn’t be a big deal for “kids” in their 40s who should be able to get by with a smaller windfall and focus on grieving for parents vs grieving for taxes on a sudden fortune.
The “catering” article does not give us enough info. 100k for catering during a flight sounds terrible but apparently it includes security, etc. A breakdown would have been helpful.
Either way, the two issues aren’t connected. The Government should tighten the belt but not to spare taxation on a couple of whinging brats.
8:07 am
September 11, 2013
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Agreed, of course RRSPs should be taxed on death, there were previous tax deductions claimed when the contributions were made.
The problem is the media, as usual, is not telling the truth, starting in fact with the headline "Daughter hit with $660,000 tax bill when both parents died in same year". That is a complete fabrication, the daughter was hit with no tax bill at all, it was the last parent to die's estate that was hit with a tax bill.
If the estate doesn't have enough money to pay its taxes the beneficiaries are not liable for anything. Unless, of course, they previously received distributions from the estate, that can be recovered by CRA as distributions to beneficiaries should not be made without leaving enough in the estate to pay its final tax bill.
"Financial distress" is irrelevant, tax laws need to be applied to everyone, it's not on a case by case basis. And no distress in this case anyway, they inherited a "cottage" (which apparently was of suitable quality and location to use as a principal residence), insurance policy and additional assets, including likely proceeds from the sale of the home a few years prior, i.e. the kids ended up with a nice inheritance. For the daughter to go to the media with a victim narrative, well, that's typical, I guess.
10:43 am
November 18, 2017
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Right with ya on this, Bill.
And, as Newton and mordko pointed out, the travel expenses for an official government delegation are not at all out of line, as listed in the article.
RetirEd
11:48 am
April 6, 2013
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Bill said
The problem is the media, as usual, is not telling the truth, starting in fact with the headline "Daughter hit with $660,000 tax bill when both parents died in same year". That is a complete fabrication, the daughter was hit with no tax bill at all, it was the last parent to die's estate that was hit with a tax bill.
…
That's correct. It was her father's estate that owed $669,126 of taxes on both the collapse of his $715,000 RRSP and the capital gains on the deemed disposition of his cottage on his death.
Not sure where the hardship came from. The estate could have paid the taxes easily from the proceeds of the $715,000 RRSP alone.
3:07 pm
March 30, 2017
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RetirEd said
the travel expenses for an official government delegation are not at all out of line, as listed in the article.
you got to be kidding.
If they are paying out of their own pocket, you think they will spend as much (let's be fair and deduct security and special handling fee for diplomat, etc)
Give u a simple example, I can open a bottle of water at my hotel room and get charged $8. Or I can go downstairs to the convenient store and pay $2 for the exact bottle.
A diplomat opens the $8 bottle, I walk downstairs and open the $2 one, enuf said.
5:38 pm
November 18, 2017
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I'm not kidding. The staff are working, in somewhere they don't know their way around, and can't waste time searching out tourist hints. If they have a travel co-ordinator, that person can guide them. Of course, all the security and other personnel, insurance etc. are not optional.
RetirEd
