Following the death of their mother, two adult sisters inherited a property, for which expenses for property taxes, maintenance and insurance were incurred between the date of death and the property’s sale. The property was unoccupied during this period. Could such expenses be added to the adjusted cost base of the property under s. 53(1)(h)?
The Directorate indicated that s. 53(1)(h) was unavailable because the property did not come within the definition of land in s. 18(3) (i.e., there was a building), and then stated:
Where property taxes are not deductible in computing a taxpayer's income from land by virtue of either paragraph 18(1)(a) or paragraph 18(1)(h), the amount of such property taxes cannot be included by virtue of paragraph 53(1)(h) in computing the adjusted cost base of the land.
On the other hand, the cost of a property may include legal fees, commissions, brokerage fees, and any other expenses that were incurred directly in connection with the acquisition of the property or that were incurred for the purpose of disposing of the property.