Taxes from selling foreign property
First of all, please let me share some background information to illustrate our situation.
Before moving to Canada from Poland in 1994, my mother was gifted with a piece of land by her mother, a property that had a very low value at that time (probably within $10k in today's currency). However, due to a recent expansion of the nearby airport, the value has drastically went up over the last few years and from our brief research it might be sitting now at way over $100k.
Now lets assume that our estimates are correct and she decides to sell this property, how should this be reported on the corresponding year's tax return? Since the subject of selling never came up before and we were under the impression that due to its low value there was no need to report it as a foreign property on any previous tax returns, could this create an undesirable chain reaction when the actual sale takes place? In addition, are there any legal methods of lowering the Canadian tax in such circumstances, for instance by declaring that the sale proceeds will be divided among children as a gift (which actually might be the case)?
Any help will be greatly appreciated!
Before moving to Canada from Poland in 1994, my mother was gifted with a piece of land by her mother, a property that had a very low value at that time (probably within $10k in today's currency). However, due to a recent expansion of the nearby airport, the value has drastically went up over the last few years and from our brief research it might be sitting now at way over $100k.
Now lets assume that our estimates are correct and she decides to sell this property, how should this be reported on the corresponding year's tax return? Since the subject of selling never came up before and we were under the impression that due to its low value there was no need to report it as a foreign property on any previous tax returns, could this create an undesirable chain reaction when the actual sale takes place? In addition, are there any legal methods of lowering the Canadian tax in such circumstances, for instance by declaring that the sale proceeds will be divided among children as a gift (which actually might be the case)?
Any help will be greatly appreciated!
Last edited by substorm on Apr 26th, 2018 3:29 am, edited 1 time in total.