Principal Issues: Whether a transfer of legal title of a personal residence to the taxpayer's daughter will be a "disposition" for tax purposes in a situation where the daughter and her family live in that residence.
Position: None taken.
Reasons: It is a question of fact whether the daughter is the beneficial owner of the property. The matter has been referred to the XXXXXXXXXX TSO for action and resolution.
XXXXXXXXXX 2010-037971 Tim Fitzgerald, CGA
October 29, 2010
Dear XXXXXXXXXX :
We are responding to your faxed correspondence of September 17 and October 21, 2010, concerning the tax implications of a transfer of legal title to a residential property to your daughter.
You plan to transfer legal title to the property to your daughter in the near future. However, you are concerned that the transfer of legal title to the property might be treated as a disposition for tax purposes, which would require you to report a capital gain on your income tax returns.
Your position is that the transfer of legal title to your daughter should not be treated as a disposition for tax purposes because in your view, your daughter already beneficially owns the property. Therefore, in your opinion there should be no capital gain to report on your tax returns as a consequence of transferring legal title to your daughter.
You have asked whether the CRA would agree with your position that the transfer of legal title to the property will not be treated as a disposition for tax purposes because your daughter is beneficial owner of the property.
The determination of who beneficially owns the property is a question of fact. Accordingly, we have forwarded your correspondence to XXXXXXXXXX Tax Services Office for action and resolution. Please contact XXXXXXXXXX at XXXXXXXXXX .
Yours truly,
Sandy Parnanzone
Manager,
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy & Regulatory Affairs Branch
cc. XXXXXXXXXX Tax Services Office