How does "right of survivorship" work with joint tenants owning property in Ontario?

[carverman]

This is indeed the question. Beneficial ownership (for a real property) typically comes with risk/liability, possession/occupancy, entitlement to income from the property, etc. The fact that mom was a co-signer on the property is another factor leading towards beneficial ownership.

Here's the relevant Interpretation Bulletin from Revenue Canada on real property and beneficial ownership: http://www.cra-arc.gc.ca/E/pub/tp/it437r/it437r-e.pdf

I know that taking her off the title is a transfer/disposition of her interest. But what is the nature of that interest?

Thank you MoneyGal for bearing with me, while I try to understand what needs to be done through a lawyer (or real estate lawyer) now.
BTW, I saw that document earlier today... but didn't fully understand it.


<excerpt from that document>
As indicated in ¶ 1 above, the ownership requirement for the principal residence exemption contained in paragraph 54(g) can be met by the legal owner of the property.
This is so even where the legal owner, e.g., a trust, is not the beneficial owner. However, as discussed in the current version of IT-120, there are other requirements that
must be satisfied for a taxpayer to be able to claim the principal residence exemption.

[I]There are special provisions in the Act which make it possible for any personal trust, including a spousal trust, to claim the principal residence
exemption if it disposes of the property[/I].

For more information on these rules, see Form T1079, Designation of a Property as a Principal Residence by a Personal Trust.

I think that a real estate lawyer may be able to do something. to file some form, to adjust this so that disposal of my property by mom. is disposal of property as principal residence by a personal trust.
She didn't co-sign on the property to benefit in any way, only to protect me from the legal wolves at the time the property was bought.

If I interpret this site correctly, there are SOME exceptions allowed for a parent who is on the title with a child, where the child (me) lives in that property as principle residence.
http://www.tavana.ca/newsletter/news...sp?iddetail=18

<excerpt from newsletter above>
UNDER WHAT CIRCUMSTANCES IS 100% OF THE CAPITAL GAIN ON THE SALE OF YOUR PRINCIPAL RESIDENCE EXEMPT?
You or a personal trust (but not a corporation) owned the property solely or jointly.
You were a resident of Canada throughout your ownership of the housing unit.
**The principal residence was ordinarily inhabited by you, your spouse, common law partner, (current or former) or your child. (adult or underage).**

The exception is an election under Subsection 45(2) or 45(3) of the Income Tax Act, which allows you a four-year exemption from ordinarily residing in it.
The exemption can be more than four years if your job requires you to stay elsewhere. See 13 below.

You, your spouse or your children under the age of eighteen DO NOT own another property, which they designated as their principal residence.

**The primary purpose for acquiring and selling your principal residence was NOT to make a profit.**

The property’s use was NOT totally or partially changed throughout your ownership. (Post 1971) Partial conversion gives partial exemption see below.
The land on which the principal residence was built does NOT exceed half a hectare (5,000 square meters or 1.23 acres).
This limitation could be increased depending on zoning by-laws and proof that a larger acreage was necessary for the full enjoyment of the property.
You did not own the land on which you built your principal residence for more than two years before putting a building on it and ordinarily inhabiting it.
<end of excerpt>

[MoneyGal]

Just keep in mind that what you are suggesting in your post above is that your mother declare YOUR house as her principal residence. As a person can only have one principal residence at a time, this means she would lose the principal residence exemption for the years for which she is declaring your house as her PR.

I need to stop the action (at least on my part) on this speculating; there are too many details to keep track of and the conversation is not clear. A professional advisor, likely a tax accountant with estate planning experience, should be able to help you sort this out. That person will need to consider mom's overall tax situation and estate plans as well. I know that joint ownership is often used as a "poor man's estate plan" but it is not without complications and this thread is an example of that.

[carverman]

Just keep in mind that what you are suggesting in your post above is that your mother declare YOUR house as her principal residence. As a person can only have one principal residence at a time, this means she would lose the principal residence exemption for the years for which she is declaring your house as her PR.

I need to stop the action (at least on my part) on this speculating; there are too many details to keep track of and the conversation is not clear. A professional advisor, likely a tax accountant with estate planning experience, should be able to help you sort this out. That person will need to consider mom's overall tax situation and estate plans as well. I know that joint ownership is often used as a "poor man's estate plan" but it is not without complications and this thread is an example of that.

Ok, thanks. I understand, MoneyGal.

From what I've been able to glean from CMF and the internet (estate lawyer's blog) it probably is not possible for mom's estate to pay CG on her joint ownership of my property after she passes.

However one last question on this subject, if anyone can give me a comment at least.
If I go through the motions of hiring a lawyer to handle the transfer of her interest in my property to me, is there a CG tax payable by her (when she files her income tax), in the year that this occurs?

[MoneyGal]

IF there is capital gains tax payable, then yes, it is due in the year of the disposition of her interest. BUT whether or not there is capital gains tax payable depends on the nature of the interest she is disposing. You need tax advice to accompany the legal work.