I have a client who transferred 50% of the ownership of the principal residence to his wife, just want to know on the T2091, when it’s not 100%, how does everyone report the ACB and Procced ?
Thanks
It’s irrelevant - unless he moved out, and his wife stayed in the house? Or his wife moved out and started renting “her” half of the house that he still lives in? If the house is still their principal residence, there is no change to his situation, so no disposition needs to be recognized.
Related:
In Saskatchewan (not sure about other provinces), per the Homestead Act, both spouses legally own 50% of the house, even if the title is only in one spouse’s name.
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As confirmed by @Nezzer… Subsection 73(1.01) deems transfers between spouses to automatically occur at the transferring spouses cost base. Adding the spouse to the deed is not an event that requires reporting for income tax.
If (for some reason) your client wishes to transfer half of the property to his spouse at “fair market value” then an election under subsection 73(1) must actually be filed.
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Perfect. Thanks @Nezzer and @snoplowguy , I was checking on the resources, but it didn’t give a clear answer, it said " If", so, kind of worry about that.
In the case of a “living” transfer (ITA 73(6)), as per paragraph 2.72 of folio S1-F3-C2, there is no requirement of the owner to file a T2091 form in the year of transfer. However, the transferor (owner) should, in any event, complete the designation form and, if it is not filed by the transferor, it should be retained by the transferee (spouse). In the year of disposition, the spouse will produce the designation form for their years of ownership, and also include the designation form from the owner produced at the date of transfer.