Sold non-principal residence

[CynthiaH]

Hi There,

In 2020, my husband and I sold a house that we had co-owned with my mother.  I am a little confused about how to claim it in taxes because it was not a rental property.  We simply had put money in to make the house more affordable for her, and as part owners have made a profit of the years.  

Do I still enter this as sale of a rental property even though it has never been rented?  Or is it just a capital gain at that point? Assume I can divide the gain in half and my husband and I each claim half.  

 

Thanks,

Cynthia

 

[TheTaxSmith]

Hello CynthiaH.

You just claim it as a capital gain, no need to complete a rental statement. Make sure you include all the costs for the original purchase in the ACB. Those costs would be the legal fees, transfer taxes, financing charges, appraisals and surveys.

You also need to include expenses for the sale such as real estate commissions, loan discharge fees, etc as expenses of disposition.

You would split the gain with your spouse.

[CynthiaH]

Thanks - we owned 26% of the house, so for "your percent share", I put 13% each for my husband and I.  Instead, it is attributing the full capital gain to us?  

 

Do I need to only enter 13% of each number for each of us to make it work properly?  

 

[TheTaxSmith]

Hi CynthiaH.

On the capital gains schedule for Real estate you would enter the Date of Acquisition, Date of Disposition, Proceeds of disposition (the total amount), The Adjusted cost base of the property (the total amount), the Expenses (again the total amount). The enter your share which is 13% as you stated. Do the same for your husband.

Trust that helps.