Daughter has her own house but added her name to the title of her mom’s house in 2023 to avoid probate when mom passed. Mom ending up selling her house end of 2025 while she was still alive. Cheque for the house was made directly to mom and $ went in mom’s account. Does Daughter have to claim capital gains from sale from 2023-2025? The house sold over asking price.
This article has some good insights that might help you: Tax Implications of Adding Yourself on Title to Your Aging Parent’s Home: Principal Residence Considerations - Shajani CPA
This is great information. Thank you very much
This is a good article and pretty much sums up the general framework for bare trusts.
Ideally, you’d want to have a bare trust arrangement in place and inked. The problem is that who the hell really knows that outside of those of us who work in tax .. situations such as this were apart of the reasoning for the liberal governments bare trust reporting regime initially.
CRA is primarily concerned with beneficial ownership. In this case, you’d report the sale of the property on the moms T1 (and claim the PRE via T2091). Probate and other estate planning mechanisms such as this are generally viewed as “permitted” transactions by CRA. That being said, you should have no real issues with explaining this to them given you are selected for review.
The reporting shenanigans back in 2023/2024 showed us that CRA doesn’t have a standardized legal framework that they accept for bare trust arrangements (i.e. paperwork). However, you’d probably still want to contact a lawyer and have something drafted.
Hope this provided some insight. GL
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“Daughter has her own house but added her name to the title of her mom’s house in 2023 to avoid probate when mom passed. Mom ending up selling her house end of 2025 while she was still alive. Cheque for the house was made directly to mom and $ went in mom’s account. Does Daughter have to claim capital gains from sale from 2023-2025? The house sold over asking price.”
Ouch - these folks are about to find out that “cheap is very expensive”
Yes, on these limited posted facts given, the mother disposed of, and the daughter acquired, 50% of the house at FMV on the transfer date in 2023. And then the daughter had a capital disposition also in 2025. (The transfer documentation shows that mother gifted 50% to daughter in 2023).
Expensive Capital Gains tax effects now follow.
At the time, mother and daughter should have attended meetings with their professionally qualified lawyer and their professionally qualified accountant for the law matters.
(instead of using “folk-lore” so to speak)
They should now do so, and see if that lawyer and accountant can rescue the situation with some creative lawyering regarding the legal and the beneficial ownership matters and documents.
It goes without saying that the 2025 T1s will have to wait until such lawyer/accountant meeting has taken place if they wish a decent outcome.
Disagree. The fact that the money went into the mother’s account suggests that there was no change in beneficial ownership in 2023, which means by definition there was no disposition that year.
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@iain.fyffe Those were my thoughts exactly.
This is not factually correct. See me response above.
@Deepinthemoneycall
Disagree on the internet as much as you want, its a free internet. 
However, as for me, I would definitely not proceed further otherwise than I posted without all the complete file documentation and the lawyer.
@iain.fyffe
Disagree.
The fact is that the legal title of Joint Tenancy registered in the Land Titles office establishes the ownership, with equal undivided shares, with nothing at all suggesting anything else. (And, especially not the setting up of a Trust).
And again, as for me, I would definitely not proceed further otherwise than I posted without all the complete file documentation and the lawyer.
The definition of “disposition” in the ITA contains an exception for when there is no change of beneficial ownership. Paragraph (e) in the definition of “disposition” in 248(1). Given the facts presented, where the daughter’s name was added for estate planning purposes, and the proceeds from the sale went entirely to the mother, it seems pretty clear that there was no change of beneficial ownership.
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The definition of disposition in the ITA is based on changes in beneficial ownership, not legal ownership. There can be changes to legal ownership but not beneficial ownership, and there can be changes to beneficial ownership but not legal ownership, and there can be changes to both.
The facts presented (name added to avoid probate, proceeds going 100% to mother) suggest there was no change in beneficial ownership, which is what matters with respect to a disposition for tax purposes.
Again, this may be evident for legal purposes, but it is not relevant for tax purposes. Beneficial ownership is the deciding factor .. You don’t need to “set up” a trust for there to be a bare trust arrangement in place. I defer back to my initial commentary with regard to “why” the initial reporting framework for bare trusts was proposed to begin with.
Per say, I’m not really disagreeing with you more so I’m telling you that you’re wrong. Instead of fighting somebody with a decade of experience in trusts and estates, try learning from them.
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You are correct.
Three decades of trusts and estates - (and more in the taxation of them).
I’m sure ..