Get T2091

A family unit (the taxpayer, along with her spouse and any unmarried minor children) is entitled to one principal residence exemption (PRE) per year. Check if the property is eligible (see PRE criteria ). Determine in what years the property was your client's principal residence.

You can sell your primary residence exempt of capital gains taxes on the first $250,000 if you are single and $500,000 if married. This exemption is only allowable once every two years. You can add your cost basis and costs of any improvements you made to the home to the $250,000 if single or $500,000 if married.

Proceeds of disposition Usually the amount you received or will receive for your property. In most cases, it refers to the sale price of the property. This could also include compensation you received for property that has been destroyed, expropriated, or stolen.

To claim the whole exclusion, you must have owned and lived in your home as your principal residence an aggregate of at least two of the five years before the sale (this is called the ownership and use test). You can claim the exclusion once every two years.

Use Form T2091(IND), Designation of a Property as a Principal Residence by an Individual (Other Than a Personal Trust) to designate a property as a principal residence.

One per family. A family unit can only designate one property per year as a principal residence. ... Must inhabit the home. ... You have choices. ... Cannot earn income. ... Restriction on the amount of land. ... Remember, any property you own and use.

To claim the whole exclusion, you must have owned and lived in your home as your principal residence an aggregate of at least two of the five years before the sale (this is called the ownership and use test). You can claim the exclusion once every two years.

When you sell your principal residence or when you are considered to have sold it, usually you do not have to report the sale on your income tax and benefit return and you do not have to pay tax on any gain from the sale.

To avoid capital gains tax on your home, make sure you qualify: You've owned the home for at least two years. This might be troublesome for house-flippers, who could be subjected to short-term capital gains tax.