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.
Dear Sirs:
Re: Land Qualifying for Principal Residence Exemption
This is in reply to your letter dated September 3, 1991 in which you asked for our views on the application of the capital gains exemption for the disposition of a principal residence in paragraph 40(2)(b) of the Income Tax Act (the Act).
You have provided us with the following situation:
1.
2. 24(1)
3.
4.
5. 24(1)
Unfortunately, it is not possible to provide you with an opinion on an unspecified future transaction as it is not possible to establish all that relevant facts. As a further comment, we note that since the responsibility for the review of the current status of your situation falls within the responsibility of your local district taxation office, you may wish to contact the Vancouver District Taxation Office in that regard. We are, however, prepared to provide you with the following general comments.
Where a lot on which a housing unit is located and an adjacent lot are both acquired in conjunction with the acquisition of the housing unit (and the adjacent lot was not used to earn income from a business or property), it is our view that no proof would normally be required with respect to the "use and enjoyment" requirement set out in subparagraph 54(g)(iii) of the Act provided the land does not exceed 1/2 hectare (1.24 acres). These comments are also consistent with the Department's general position in paragraph 11 of InterpretationBulletin IT-120R3 entitled "Principal Residence".
We hope that our comments will be of assistance to you.
Yours truly,
P. Fuoco for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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