# Mother in law is on welfare and just got less than 100K in capital gain from Europe



## bobert7 (Sep 24, 2011)

Hi guys, this is take 2 on trying to post this.

So here's the situation.
My mother in law is on welfare, and recently, she sold an apartment she had in europe, and an apartment that she inherited with 2 more siblings.

She made about 67K Euros, but has to pay some bills there so we're looking at her having about 30K in hand.

She wants to gift my wife and I some money, and the rest build a nest egg for herself and my father-in-law.

I know we wont be taxed cause it's a gift, but what are the tax implications for her? If it's less than 100K (which it is) does she have to report it? Or maybe she might be asked how she came across the money.

Does anyone know where i can find info on what implications it might have on her welfare?

Thanks


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## Karen (Jul 24, 2010)

I know nothing about the legal/tax implications of your mother-in-law's inheritance, but my first thought on reading your post was that she has no moral right to be gifting any of that money to anyone while she's on welfare.


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## MoneyGal (Apr 24, 2009)

What is "welfare," exactly, in her case? Is it OAS/GIS?

Has she been reporting her interest in this foreign real property on her Canadian tax returns (if she is required to...It isn't clear from what you posted)?

The short, generic answer is that she is going to have to report the capital gain on a Form T1135, and she will likely have to pay capital gains tax on the gain, and she may receive a credit for any income tax paid to the country in which the property was held. 

She shouldn't be too quick to distribute the proceeds until she knows what the after-tax amount is.


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## marina628 (Dec 14, 2010)

Depends if her goal is protect her welfare check....


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## OhGreatGuru (May 24, 2009)

bobert7 said:


> ...she sold an apartment she had in europe, and an apartment that she inherited with 2 more siblings.
> 
> She made about 67K Euros, but has to pay some bills there so we're looking at her having about 30K in hand.
> ...
> I know we wont be taxed cause it's a gift, but what are the tax implications for her? If it's less than 100K (which it is) does she have to report it? Or maybe she might be asked how she came across the money.


Whether it was more or less than $100K is immaterial. She to has declare her foreign income. (You are thinking of the question on the T1 about whether or not you own more than $100K of foreign property.) 

From the sound of things her share of the 2 properties did not add up to more than $100k, so she may not be in any trouble for not reporting them previously.

If the inherited apartment was very recently inherited, there is no inheritance tax in Canada. However, if she & her siblings inherited it some time ago, and it appreciated in value, she owes capital gains tax on the increase in value from the time that she inherited it. The estate papers ought to have a valuation at the time of death.

The apartment she owns outright she owes capital gains tax on the difference between her "adjusted cost base" and her disposition price. If she is paying bills "there", and they are related to the cost of caring for or disposing of the property they can possibly be deducted from her net profit for the sales. But ti would depend on what the "bills" were for. Also, if this was an income property, and she has not been declaring the income, she should consult a tax lawyer.

As someone above suggested, she shouldn't give anything away until she has settled her tax liability. And "re-gifting" to you does not help her evade that liability.

PS she will likely be asked by her financial institution how she came across that much money, because they have to report it to FINTRAC.


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## Berubeland (Sep 6, 2009)

Welfare are you kidding me? If it is really welfare AKA Ontario Works, then she has to live on that money. Furthermore what is the matter with her...she's trying to continue to live off the government when she has plenty of money to support herself. 

I'm sorry but you just reinforced the stereotype of the immigrant coming here and and milking the government dry. OMG


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## slacker (Mar 8, 2010)

Hey, the mother-in-law was going to use that tax break and use it to create jobs. Are you against job creation?

The less the government tax, the more jobs it will create, plain and simple.


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## Karen (Jul 24, 2010)

Berubeland said:


> Welfare are you kidding me? If it is really welfare AKA Ontario Works, then she has to live on that money. Furthermore what is the matter with her...she's trying to continue to live off the government when she has plenty of money to support herself...


I've been amazed to see that up until now, no one seemed to agree with me about that - or at least consider it worth commenting on, so I was delighted to see your post!


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## MoneyGal (Apr 24, 2009)

I didn't not agree, I just didn't comment. 

If your MIL is receiving Ontario Works, she is expected to report this lump sum income to them. If she does not, that is considered fraud. 

As a general rule, she will be "disentitled" to benefits based on their calculation of "provident" spending of the lump sum. If she gives it all away, she will still be disentitled to benefits. 

If she has a plan to spend the money "providently" (these are terms from the Ontario regulations), she may be able to retain eligibility for OW (if that is, in fact, the "welfare" she is receiving). Provident spending includes things like debt repayment, the purchase of furniture (within limits) or disability-related items and, in some cases, the purchase of a home. 

For more information on Ontario Works (if she's in Ontario, for example), here is a link to all the policy directives: http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/ow_policy_directives.aspx


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## Toronto.gal (Jan 8, 2010)

Karen said:


> I've been amazed to see that up until now, no one seemed to agree with me about that - or at least consider it worth commenting on, so I was delighted to see your post!


I thought the same Karen; when I read such things, my blood simply boils!


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## humble_pie (Jun 7, 2009)

the original post is not clear at all, not even clear as to whether there was one apartment or 2.

it's possible that a) MIL inherited one apartment jointly with 2 sibs & sold this property fairly quickly; or b) alternatively, MIL did inherit & sell an interest in one apartment, and at the same time she also sold another apartment that she herself had owned for some time.

if the former - if it was an inheritance only - why would this be considered "lump sum income."

there's an interesting linguistic slip in the original post, in which the OP writes that MIL "made" 67,000 euro. Some readers are interpreting this use of the verb "to make" as meaning capital gains. However, i think that the OP has a slight skew in his use of written english & is using the verb "make" in the sense of "received," meaning the MIL received 67,000 euro as gross proceeds of the sale.

assuming there was only ever one apartment & it was the inheritance & it was sold fairly soon after the death of the testator, any capital gains arising from the difference between market value of the property on the day of death & proceeds of the sale would be negligible.

not only that, but the faraway executor would presumably be filing estate tax returns in the country of origin. The real estate calculations & the various "bills" paid by the estate would be included in that estate tax return. Here in canada, the MIL would not be reporting the gross transactions of a foreign estate in which she had a partial interest. She'd only be reporting the net transactions as flowed through for her partial interest. Presumably, she'd have a tax document prepared & filed in the country of origin.

as for whether & how the inheritance, once received, affects the MIL's welfare eligibility, it's interesting to note that one of the posters here in this thread who vehemently & loudly denounces MIL's welfare eligibility has previously - even more vehemently & more loudly - supported the far more fraudulent "immigration" status of a family that was ripping off the quebec social assistance system to the tune of several thousand $$$ per annum.

in general, the fraud consists of newcomers who arrive in canada while refusing to disclose foreign assets & incomes. In general, the disclosed metrics in these cases are only sufficient to obtain welfare, child cash benefits, free education & free medical care for the families. Meanwhile, the family keeps most of its wealth hidden overseas.

in quebec, child benefits in the form of cash paid directly to the mother are the most generous in the entire world. Far higher than the rest of canada & surprisingly higher than in any scandinavian country. Thus there are criminal rings of shadowy "immigration consultants" working to bring new families to quebec that will, soon after arrival, turn out to be economic parasites. Regularly every year, the surete du quebec & immigration quebec expose & arrest one or more of these rings. The most recent one was working out of Laval, a large montreal suburb.

the previous case that provoked loud & vehement cries of support-for-immigrants here in this forum involved $$$ amounts that were vastly larger than the 30,000 that the OP is discussing in this thread. All will note that MIL is said to be planning gifts to her adult children & the creation of a "nest egg" for herself & husband, presumably for their old age, out of this 30k. The OP does not appear to be deliberately searching for ways to cheat the welfare authorities. Rather, OP asks for help in understanding what the tiny windfall will do to MIL's welfare status. 

in that sense, MoneyGal's links to inforrmation that will show how social assistance can be reduced if a recipient ever lands a windfall, such as an inheritance, are very helpful.


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## Homerhomer (Oct 18, 2010)

Berubeland said:


> I'm sorry but you just reinforced the stereotype of the immigrant coming here and and milking the government dry. OMG


Thankfully none of the locally born ******** are ever on welfare, just good ol hard working irish lads who's granparent came here to make the country better ;-)

I hope our government would have guts to get rid off the welfare system all together, I have no problem supporting poeple with disabilties, retraining programs and so on, but life time support for lazy bums is not my idea of wasting my tax money.


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## MoneyGal (Apr 24, 2009)

humble_pie said:


> if the former - if it was an inheritance only - why would this be considered "lump sum income."


For the purpose of Ontario Works, it is "lump sum" income - actually called "chargeable income" for OW. Chargeable income is income that is used to reduce OW benefits. 

Some forms of income are "chargeable," and some are not. When a recipient receives a lump sum, they are expected to spend it "providently" (again, all terms are from Ontario; I don't know what the regulations are in other provinces/territories). That is, the recipient is expected to show a plan to disburse the income over time and "providently." 

The reach of the enforcement officers into the lives of welfare recipients is pretty astounding. The eligibility review officers can use their administrative "eligibility" assessment powers to facilitate search and seizure powers for criminal fraud investigative purposes. 

I've never been on welfare, I never want to be on welfare, and just avoiding that level of scrutiny into my personal affairs gives me the chills.


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## Four Pillars (Apr 5, 2009)

I'm pretty sure everyone reading had the same thoughts I had. This is why I'm not going to try to help this person. 

They can figure it out themselves.


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## andrewf (Mar 1, 2010)

Welfare is designed to keep people poor... There is a reason it is called the welfare trap.


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## bobwatford123 (Aug 9, 2011)

andrewf said:


> Welfare is designed to keep people poor... There is a reason it is called the welfare trap.


Well I certainly hope it isn't designed to get them wealthy


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## Berubeland (Sep 6, 2009)

slacker said:


> Hey, the mother-in-law was going to use that tax break and use it to create jobs. Are you against job creation?
> 
> The less the government tax, the more jobs it will create, plain and simple.


What jobs is she going to create? How about if she pays her fair share of taxes and not one penny more to reimburse the government for all that OW they've been providing. Because that's how they provide it by taxing people... 

Didn't sound like she was going to start a business with her windfall...it sounds like she's going to give the money away so she can continue to collect money, money that you give them via an expensive channel that requires social workers, managers and so on all who need to be paid...

Don't worry thought there's lots of fraud going on...like all those people on OW who spend the rent portion of their OW and rip off their landlords for thousands.


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## andrewf (Mar 1, 2010)

bobwatford123 said:


> Well I certainly hope it isn't designed to get them wealthy


It should be designed to raise their market income (ie, their non-government income).


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## praire_guy (Sep 8, 2011)

Berubeland said:


> Welfare are you kidding me? If it is really welfare AKA Ontario Works, then she has to live on that money. Furthermore what is the matter with her...she's trying to continue to live off the government when she has plenty of money to support herself.
> 
> I'm sorry but you just reinforced the stereotype of the immigrant coming here and and milking the government dry. OMG


It isn't a stereotype if it is true. 

Here in Manitoba we have many "refugees" on welfare, liking the govt dry AND running with gangs, making money illegally. 

And when they get shot the parents blame Canada and do an hour long show on Venture.


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## Berubeland (Sep 6, 2009)

Refugees have no choice but to be on welfare because they are not allowed to work which is stupid. 

I know this because I rented my basement apartment to two priests that escaped with their underwear and their lives from the Congo when people with machetes came to chop them up into little pieces. 

However when they did get here, they did want to work for the Church, and did work but they could not be paid until their proper paperwork came in which took two years. In the meantime they lived on OW because they had no choice. 

I have nothing against that... it just seems stupid and unhealthy for our government not to give them work visa's so they can do something productive with their time and better themselves and make money while they are waiting for their paperwork to come in.


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## bobert7 (Sep 24, 2011)

ok for those of you that wanted to turn this into a welfare pissing game

details:
Both mother in law and father in law have had bouts with cancer, father in law TWICE and two removed tumors
father in law is currently disabled
mother in law is currently looking for work after completing a government funded professional program
She cant work more than part time because someone has to take care of my father in law

The money she's making from the sales will go towards paying their massive debts due to not being able to work while they were both ill time and to put money asside for funeral costs so they wont "burden" us with charges

The money they are "gifting" to us is a wedding present which is not even a big enough amount to cover 1 year of rent.

They also never claimed bankruptcy to cover their debts cause they dont feel its fair to have banks pay their depts so they've been keeping up with rent food and monthly debt payments on what little money they make

so for those of you on your high horses, these people deserve welfare as its being used for what it was created. If you dont agree with what welfare was created, well thats your fault.
They are not trying to circumvent the system nor have they been abusing it.

They were both professors before they both got ill so they didnt come here for the welfare. They came here and worked and then life threw them a couple of curveballs and once my mother in law was healthy enough to work, no one would hire a 60 year old ex professor who can only work part time

They're not "immigrants" working under the table and cashing a welfare check, or "locals" that cash a welfare check and head to the liquor store..

for the person complaining about immigrants, maybe you should look up who's mostly on welfare before opening your fat judgemental mouth


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## bobert7 (Sep 24, 2011)

sorry about the venting
i came here for help not to get judged
my inlaws want to do the "legal" thing so they asked me to look into it

Getting back to the situation
The properties have not gained value cause they were sold under market value cause they just wanted to get rid of them ASAP

On my MIL apartment she sold it for the equivalent price she had bought it years ago, if not less, and on the one she had inherited from her mom with her siblings, value was 120 euros when they got it and they sold it for 50 euros.


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