I have a client who now owns a 2nd real estate property outright that is not his principal residence. It had been occupied and owned by his mother.
Do the circumstances by which he came to own the property exempt him from any capital gains tax exposure? That is, can the 2nd property ever qualify as a “2nd principal residence”?
I assume that the argument can be made that his ownership interest only began the day his mother died and that he inherited this new real estate at current market values. It was exempt for her, now he has two.
His mother’s property runs the risk of exposure to capital gains. We need to have an increase from the date of death to the date of disposition. This is the risk. So, you will need a valuation to be completed at the time of death.
Brian Madigan LL.B., Broker