A client has sold a property in 2023. The property is a condo.
During the two years that they owned it, her parents lived there rent-free so the couple never claimed it as a rental property on T777.
They have never claimed the property taxes, interest, insurance, etc paid during the 2 years.
They have sold the property in 2023. Because they have not claimed the above mentioned expenses in the previous years, can they add them to the ACB to lower the capital gain?
Thank you!
No. You can only do that for bare land as far as I am aware. It’s an occupancy cost and it doesn’t matter whether your client paid the expenses or her parents did and it simply wasn’t claimed as rent income.
Yes, I searched large and wide on the internet and couldn’t find that confirmation that we can… Legal fees, major renos, Yes, but not to the regular expenses to maintain the property…
Thank you for your reply!
No. Plain and simple. Sweep it under the rug and move on.
Because the let their parents stay there rent free, there was no expectation of making a profit therefore they cannot deduct expenses.
It should be treated as a second residence and capital gains taxes would apply.
Should it not be treated as the parent’s principal residence?
The parents were not the owners, only the residents.
If the owners (the young couple) had no other residence, they may be able to claim it as their principle residence but the fact that they want to claim deductions tells me that they have another residence elsewhere.