Capital gains on selling foreign property.

[Jalex23]

I want to sell a property that I inherited a few years ago. This house is residential and we use it as a winter place. It produces no income. I am a permanent resident.

As far as I could tell, I would be paying capital gains on the money I attempt to bring to Canada.

Nonetheless what is throwing me off is ACB. As I inherited it, I didn't pay a thing, and this is a property that wasn't bought, it was acquired as land 70 years ago by my grandparents.

Do you know how ACB works in this case? if not, who should I be contacting to ask these questions? A tax lawyer? An international tax accountant? Any recommendations?

Thanks!

 

[armoured]

I want to sell a property that I inherited a few years ago. This house is residential and we use it as a winter place. It produces no income. I am a permanent resident.

As far as I could tell, I would be paying capital gains on the money I attempt to bring to Canada.

Nonetheless what is throwing me off is ACB. As I inherited it, I didn't pay a thing, and this is a property that wasn't bought, it was acquired as land 70 years ago by my grandparents.

Do you know how ACB works in this case? if not, who should I be contacting to ask these questions? A tax lawyer? An international tax accountant? Any recommendations?

Thanks!

Speak to a tax guy. It depends what you did then and/or can do now by filing retrospectively.

You should have been filing about ownership of foreign property, and have listed an acquisition price/market price at the time you inherited. Any cap gains would typically be paid on the difference between that and the sale price, so if it was only a few years ago, likely small.*

[Small add: adjusted cost base is the acquisition price plus some investments/improvements you might have made and included in property price. If you weren't renting it and had no income from it, you probably have none of these adjustments.]

(As far as I'm aware you would not have paid income tax / gains on the inheritance - Canada doesn't generally tax inheritance - and wouldn't have an issue with respect to Canada.** If you paid some taxes abroad they might be deductible/offset something).

Now if you have not done those filings - yes, there's a way to file adjustments for filings you should have done before. Talk to a tax guy. You probably won't have issues with this if you try to get ahead of it.

*They don't, I think, generally ask for detailed support of those valuations, but they can if they think you're fiddling the numbers.

I'm not a tax guy and you shouldn't construe what I say as advice. What I know I get from the internet incl CRA sites, but not the same thing as advice.

**All those scary stories you hear about people having their inheritance taxed here are basically misstating - the estate (of the person from whom you inherit) has to pay taxes as if they disposed of the properties before they can give it to you for free. And many estates have capital gains they've deferred or never paid capital gains taxes on for a long time.