Posted on: 06th Sep, 2009 11:39 am
I want to sell my home to my daughter and her husband will I have to pay capital gains on this transaction since I am selling it at a great discount. Will they be able to receive the $8000,00 rebate.
Hi glengorman,
You need to pay capital gains tax on the profit you make out of this transaction. But if you are selling it at a 'great discount', there probably will not be any profit. However, if you sell it to your daughter at a great discount, the sale might not be considered as valid. It will be seen as an arm's length transaction and will not be considered as a fair sale, if the sale price is too low than the current value of the property.
As far as the $8,000 tax credit is concerned, both your daughter and her husband need to be first time home buyers. This means they should not have owned a primary residence in the past 3 years.
You need to pay capital gains tax on the profit you make out of this transaction. But if you are selling it at a 'great discount', there probably will not be any profit. However, if you sell it to your daughter at a great discount, the sale might not be considered as valid. It will be seen as an arm's length transaction and will not be considered as a fair sale, if the sale price is too low than the current value of the property.
As far as the $8,000 tax credit is concerned, both your daughter and her husband need to be first time home buyers. This means they should not have owned a primary residence in the past 3 years.
in the home as your primary residence within the past 2 years there shouldn't be any capital gains tax due.
Good point on the Arms Length Transaction...
The $8000 tax credit is due to expire on 12/1 so you will want to get the transaction soon to qualify.
Best of luck!
Good point on the Arms Length Transaction...
The $8000 tax credit is due to expire on 12/1 so you will want to get the transaction soon to qualify.
Best of luck!