Personal Finance

Question about giving 50% share of homes to sibling

  • Last Updated:
  • Dec 8th, 2020 12:13 am
[OP]
Deal Addict
Apr 18, 2012
1471 posts
218 upvotes

Question about giving 50% share of homes to sibling

Parents owned 3 properties.

One primary and 2 rental properties. Both parents passed last year and now left with these 3 properties. We sold one property and used the proceeds to settle the estate and pay off various taxes to CRA due from parents death return.

The remaining 2 properties are inherited at 50/50 share. However, we want to each own 100% of one property each.

Basicslly property A my brother will give me full ownership.
Property B I will give my brother my 50% so he will have 100% ownership and in addition he will give me $100k cash.

Wondering if there are any tax implications. Am I technically disposing my property or can this title be transferred via the lawyer and say we are simply taking 1 property each at 100% share and he’s giving me 100k because the value of that property is much higher.
4 replies
Deal Addict
Jan 15, 2017
3944 posts
3407 upvotes
Need more information. What property was sold and what property remains? What is the current ownership with regards to the remaining properties and the estate? Has the will been probated? What is your estate lawyer advising?
Deal Fanatic
Oct 26, 2008
6380 posts
2024 upvotes
BC
Key point is whether the remaining rental property or properties have been reporting rental income to CRA since last year.

But tax issues aside, the name change on the title is a straightforward legal procedure that should cost you just a few hundred.

Might be best (and quite legal) not to formalize the $100K consideration. Market value is very subjective - whatever an accredited professional maintains.
The $100K could be considered just a gesture between family members because your brother thinks you deserve it.
[OP]
Deal Addict
Apr 18, 2012
1471 posts
218 upvotes
macnut wrote: Key point is whether the remaining rental property or properties have been reporting rental income to CRA since last year.

But tax issues aside, the name change on the title is a straightforward legal procedure that should cost you just a few hundred.

Might be best (and quite legal) not to formalize the $100K consideration. Market value is very subjective - whatever an accredited professional maintains.
The $100K could be considered just a gesture between family members because your brother thinks you deserve it.
I’m good with this. I was just more concerned that change would title would trigger a gain since I’m technically disposing my share of the property.
Deal Addict
Jan 19, 2017
4461 posts
2588 upvotes
snipe2014 wrote: Parents owned 3 properties.

One primary and 2 rental properties. Both parents passed last year and now left with these 3 properties. We sold one property and used the proceeds to settle the estate and pay off various taxes to CRA due from parents death return.

The remaining 2 properties are inherited at 50/50 share. However, we want to each own 100% of one property each.

Basicslly property A my brother will give me full ownership.
Property B I will give my brother my 50% so he will have 100% ownership and in addition he will give me $100k cash.

Wondering if there are any tax implications. Am I technically disposing my property or can this title be transferred via the lawyer and say we are simply taking 1 property each at 100% share and he’s giving me 100k because the value of that property is much higher.
If you do the swapping of the 2 properties very quickly after the parents' death, even thought both of you are deemed to have sold the 50% you own and then buy the 50% of the property you don't own, the cost of the 50% of the property you are selling should be the same as or close to the market value you inherit from your parents. So there should be no or very little capital gain between the day you inherited and the day you swapped them.

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