Income Tax Question

[dakota30]

I am selling my rental house. If I put the equity from that house onto the mortgage of my home, will I still have to pay the capital gains tax on the profit from the rental house sale?

If you can help, please email me at dakotasp1973@hotmail.com

Also, if anyone knows of a site that deal with this kind of thing, I would appreciate getting the link.

Thanks,

Dak'

 

[wilde]

YES.

 

[Penhold]

You are allowed only one principal residence. If you own a rental house in addition to your principal residence, and then sell the rental house, the capital gain on the sale is taxable even if you use the proceeds to reduce the mortgage on your principal residence.

This assumes, of course, that you keep your principal residence as a principal residence and that you own the rental property in your personal capacity and not through a corporation, trust or as part of an RRSP holding.

If you are planning on selling the rental property you should consult with a good accountant. Depending on your circumstances and how you've dealt with the rental property in the past (in terms of depreciation, etc.) he/she may be able to help minimize the tax consequence of the disposition.

 

[dakota30]

Like Squirrel said, I already knew what the likely answer was.

Thanks for the replies. Altho' I am disappointed with Hifi, I was kinda hoping to see a bunny with the pancake on his head kind of picture. Something to cheer me up.

 

[Makhno]

And just how do you think the children of Quebec advertising agency execs will get fed if you don't pay your taxes?

Join me for a brew at this bar and I'll buy you a round......

 

[Swguy]

I was kinda hoping to see a bunny with the pancake on his head kind of picture. Something to cheer me up.

Ask and ye shall receive......

and since I know diddly-squat about taxes, I really have no idea what you're talking about..


SWG

 

[dakota30]

LOL

Thanks SW. Perfect timing. I just got off the phone with a real estate agent who thought I was stupid enough to list the house for 15 thousand less than I paid for it three years ago and 25 thousand less than its tax assessed value. I'm just a wee bit hot right now, and not in a good way. At least I was, until I looked at the bunny.

 

[Swguy]

Glad to be of service..


SWG

 

[Makhno]

LOL

Thanks SW. Perfect timing. I just got off the phone with a real estate agent who thought I was stupid enough to list the house for 15 thousand less than I paid for it three years ago

In that case, taxes on capital gains are the least of your worries.....

 

[primetime]

Back in the olden days when I was in business school an important lesson was taught.

It is better to make money and pay taxes than not to make money and pay no taxes.

 

[Penhold]

LOL

I just got off the phone with a real estate agent who thought I was stupid enough to list the house for 15 thousand less than I paid for it three years ago and 25 thousand less than its tax assessed value.

Before listing with any real estate agent, consider getting an independent appraisal of the property from a good real estate appraiser. This should cost you only about $300 to $400, and will give you the basis for evaluating the credibility of the real estate agents with whom you may want to consider listing. Names of good appraisers can be obtained from the loans manager at your bank (since the bank uses appraisers to obtain appraisals on properties before they give the final mortgage commitment).

 

[thedesijack]

please give more information about the property for sale, like the size, price, lot size , gerneral shape and rent per month, if postive cash flow i will buy it without agent

 

[dakota30]

It's not a positive cash flow desijack.

Thanks so much to everyone for the posts and emails. I really appreciate all the info.