Capital gains tax exemption question.?

Question

If I sell off a portion of land from my rental property, and apply the profit of the sale to the rental property mortgage, will I be exempt from paying the capital gains tax?

Answer 1

Yes you would have to pay taxes on the capital gain.

There are only two exemptions for capital gains in Canada. The first is the principal residence exemption, which is how you sell your family home and not have to pay taxes on it. Rental properties obviously don't qualify. The other life time capital gains exemption is limited to Qualified Small Business shares, qualified farm property, and recently qualified fishing business property. Again, rental property would not qualify.

Cheers.

Answer 2

That's a tricky question, but in short, I doubt it. My guess is that the way it would be treated is that you are splitting your property and that you'd have capital gains on the part that you sell. You could try to do a 1031 exchange, but I believe that would require you to acquire a property and not just pay down the mortgage on one you already have.

So, the short answer is, I don't see how you can make it tax exempt.

Answer 3

a million. you will incur LTCGs on which you will desire to pay tax @ 20% on condition which you do no longer avail exemption united states54F. yet given which you could purchase a residential flat out of the proceeds, you would be exempted from tax. 2. Deposit all money in one a/c. point out this in schedule AIR of the ITR. you should preserve all documentary evidences with you, additionally related to source of earnings. 3. report ITR once you incur LTCGs. HMT

Answer 4

the gov. has enacted a one time capital gains exemption
which means you don't have to pay tax on captial gains for one time

Answer 5

No, key word here is rental. If it was your primary mortgage it would be doable.