31 December 1990 Internal T.I. 902717 F - Status of Recreational Home as Principal Residence

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

December 31, 1990

Dear 19(1)

This is in reply to your letter of September 7, 1990 concerning the sale of your recreational home.

As we understand it  24(1)  from the time or acquisition to sale, you lived in the home each year from May to October and did not use it for the purpose of gaining or producing income. You feel that you have satisfied the "ordinarily inhabited" requirement and that pursuant to Interpretation Bulletin IT-120R3, the gain should be exempt.

For purposes of our reply, we assume that you meet all of the requirements in this Interpretation Bulletin and that your only concern is with the meaning of "ordinarily inhabited" as discussed in paragraph 9 of that Bulletin. In this connection, we draw your attention to paragraphs 3 and 12 of that Bulletin concerning property designated for a year after 1981 by a related person, such as your spouse or child, and land in excess of 1/2 hectare.

As indicated in paragraph 9, provided that the principal reason for owning your home was not for the purpose of gaining or producing income therefrom, you would be considered to have "ordinarily inhabited" the home in a particular year notwithstanding that you only inhabited it from May to October of the year.

We trust that the foregoing comments will be of assistance to you. For your assistance, we enclose a copy of Form T2091 which should be filed with your tax return for the year in which the property is sold.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch