Principal Issues: 1. Whether a certain property in excess of 1/2 hectare is eligible for the principal residence exemption. 2. Which form must be completed to designate a property a principal residence and claim the exemption?
Position: 1. Question of fact. General comments provided. May be eligible for the principal residence exemption on the portion of the land viewed as a principal residence and for a capital gains exemption on the other portion used in a farming business where conditions are met to be a Qualified Farm Property.
2. Form T2091 (IND) is the prescribed form to be used to designate a property as a principal residence. It is CRA's practice that the form need only be completed and filed with the taxpayer's income tax return in the year of disposition, where a taxable capital gain on the disposition of the property remains after using the principal residence exemption.
Reasons: 1. Reading of the legislation. Insufficient facts provided to be conclusive.
2. Prescribed form for principal residence designation.
XXXXXXXXXX Joy Bertram, B.Comm.,
CGA, CPA (vt)
February 25, 2008 (613) 957-8954