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.
QUESTION # 29
Two brothers are registered as joint-tenant owners of a piece of real estate. Assume each brother has a 50 percent interest in such real estate. They wish to convert the joint-tenancy arrangement to tenants-in-common, with each having a 50 percent undivided interest. Is the conversion a taxable transaction to either or both brothers? (Note - the Department of Finance has advised that they co not consider proposed subsection 248(21) contained in Bill C-18 to apply to this situation.)
RESPONSE
In our opinion, the conversion from a joint-tenancy arrangement to a tenancy- in-common, whereby on death each brother will have his interest pass to his estate rather than to the survivor of the two, will not be considered a disposition provided that, immediately after the conversion, each co-tenant retains his 50 percent undivided interest in the property.
B.C. Institute of Chartered Accountants - Liaison MeetingVancouver DONovember 1991Claude TremblaySection 23
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