# Doing taxes for the elderly.



## wildbill7145 (Mar 22, 2018)

So, I'm doing my Mom's income taxes for the first time. She's elderly, and has dementia. I have POA. The guy who did her taxes for the last few years has retired. I'm using Turbo Tax. I have reasonable experience in completing income tax forms.

We sold the family home last year. Turbo Tax is asking me for the "adjusted cost base", which from what I understand is what my parents paid for the house back in the '60s. I have no idea what they paid for the house and neither does she. Not sure what I should enter in this field.

Any other advice for someone doing their elderly parents income taxes would be appreciated.


----------



## OnlyMyOpinion (Sep 1, 2013)

I'm assuming you are designating/claiming it as her principal residence for the entire period (e.g. it was not used as a rental)? If so, I would just make a 'best guess' on the acb since it won't matter in the end (you pay no capital gains).

I just went through this with a set of taxes as well and thought it dumb that they want 'numbers' even if it was your principal residence for the entire time.


----------



## wildbill7145 (Mar 22, 2018)

Thanks for the reply OMO. Much appreciated. Yes, it was her principle residence from purchase to sale. Never used as a rental. I think at this point, best guess is all I've got. I saw that about paying no capital gains if it's your principal residence.

I have to imagine they're asking just for the purpose of information gathering.

As far as proceeds of disposition, would you deduct lawyer fees/real estate commission/disposition of mortgage on another property/improvements made to home to prepare it for sale, etc. from the dollar amount she received for the sale?

Helping Mom go through the process of selling the house was the first time I've been involved in selling a property. Hopefully the last. What a horrible experience.

Thanks again for your help.


----------



## OptsyEagle (Nov 29, 2009)

I did the same thing for the sale of my house with Studiotax. I think you may be filling out the form wrong. With Studiotax, on Schedule 3 it asks if the property was your principle residence for:



> 1) I designate the property described on Form T2091(IND) or Form T1255 to have been my principal residence for all
> years owned ; or the property described on Form T2091(IND) or Form T1255 to have been my principal residence
> for all years owned except one , as per the exception described above.
> 2) I designate the property described on Form T2091(IND) or Form T1255 to have been my principal residence for
> ...


If you answer number 1 above, which it sounds like you should, then I believe you only need to fill out page 1 of form T2091. That page only asks for selling proceeds and years owned. It does not care about adjusted cost base. The ACB stuff is on the following pages and are only filled out if you check off 2 or 3 above and have a taxable capital gain/loss.

That is how I read it anyway.


----------



## OnlyMyOpinion (Sep 1, 2013)

I added up those selling fees and included them as 'outlays & expenses' as you would for selling shares on Schedule 3. 
So proceeds was essentially the amount of the final cheque received (excepting a portion we received due to prepayent of taxes for the balance of the year). This minus 'outlays' minus acb is the final gain (moot in your case and will not show up on Sched 3 as noted below) 

I did not deduct any of the costs for painting, repairs, new blinds, cleaning, etc. To me those were spent to sell the place quicker and at list price. In other words I recovered those in the selling price. I could have also sold 'as is'.

We also sold and had to complete returns for a non-principal house (and non-rental) for 2017 that had capital gains. For it I found it poor that there was no opportunity to assign a 50% (or other) interest in the property as you might commonly expect. So the numbers had to be split before entering into the T1. 

It also said nothing about the acb (original purchase price) including lawyer's purchase costs/fees, and nothing about outlays/expenses as discussed above.

I don't know how much of this might just be poor implementation by TurboTax. That is what I use as well.

In your case, the final T1 should have a 'principal residence designation worksheet' with address, acb and purchase price (and nothing on the Schdule 3). 

In our latter case, it all showed up in Area 4 of the Schedule 3, and the designation worksheet was printed out but was blank.

Added: I see OE's comment. Suggests to me it is poor execution by Turbotax (TT) which doesn't surprise me.
That selection ('I designate the property...') is used in TT but it also still asks for acb.


----------



## wildbill7145 (Mar 22, 2018)

Yeah, I'm just using the 'easy step' method of Turbo Tax which is more of an interview style as opposed to filling out the forms and schedules. I still have to get some Tslips from CRA for Mom's OAS/CPP and enter those before I complete things. At that point I'll be able to print things out and see the forms and schedules to see what data it's entered.

It could very well be poor execution by TT, or that's just the way they do it.

Service Canada sent my Mom a letter in the mail letting her know that they got sent something back in the mail as return to sender. I found that a bit ironic, but anyways they wanted us to confirm her mailing address. I'm assuming those were the slips for oas/cpp, which were sent to her previous address in spite of the fact that I've updated her address with them. I spoke with a very helpful woman at CRA who said she had copies of all of my Mom's slips and is mailing them out to me.


----------



## fireseeker (Jul 24, 2017)

We also sold our principal residence last year, and I believe OE is correct -- you only need to fill out the first page of the form, which only asks for year of aquisition and and proceeds from sale, if it is sheltered from tax as a PR. Here is the form:
https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t2091_ind/t2091ind-17e.pdf


----------



## gardner (Feb 13, 2014)

I believe the land registry keeps track of the value reported at the time the land was registered to your mum and dad -- and prior registry changes. I think a lawyer or RE agent would generally have access to look that up via a title search. This will not be the exact ACB, but is what the crown would get if they were to second guess your estimate.


----------



## wildbill7145 (Mar 22, 2018)

I wish this forum had a like button. Thanks folks.


----------



## OptsyEagle (Nov 29, 2009)

One last thing that is very, very, very, very important.

When you print out the tax return, whether you use turbotax or any other program, that form T2091 that you filled out when doing your tax return, DOES NOT print out or get submitted with your general tax return. Quite bizarre and stupid, but what can I say.

So you need to find form T2091 and print it out separately and submit it separately. In Studiotax, there was a print button at the top of the form that I used to print it separately. I then signed it and put it in with my tax return because I paper file mine but if you netfile, just send it in separately. I will keep an eye on my notice of assessment to confirm they filed it.

If CRA does not get that form they WILL render a penalty and it will really suck.


----------



## wildbill7145 (Mar 22, 2018)

OptsyEagle said:


> One last thing that is very, very, very, very important.
> 
> When you print out the tax return, whether you use turbotax or any other program, that form T2091 that you filled out when doing your tax return, DOES NOT print out or get submitted with your general tax return. Quite bizarre and stupid, but what can I say.
> 
> ...


Wow, that's really good info. Thanks. I'm going to try and netfile this as that's what the accountant did for the past few years. I think I'm gonna go back through this thread when I'm finished Mom's tax forms and review everything.


----------



## OnlyMyOpinion (Sep 1, 2013)

OptsyEagle, 
I'm wondering where you determined that Netfiling (using TurboTax in our case) does not provide sufficient info re/ the T2091 and that the form needs to be mailed in seperately?
The T2091 is part of the completed tax return, and it has an area for signature & date, but of course so does page 4 of the tax return and it doesn't get signed and sent in anymore when Netfiling either.
When I search CRA and Turbotax resources I can't find anything definitive about needing to send the T2091 seperately. We haven't sent it in (yet) for the return I referred to, but he NOA will be available to me on-line tomorrow and I'll see if it says anything on it.


----------



## OptsyEagle (Nov 29, 2009)

If it doesn't print out for paper returns, I assume it doesn't netfile either. Perhaps I am wrong, but I doubt it. Try to print out a copy of the tax return in pdf and see if you can find it. My bet is you won't, but let us know if I am wrong.


----------



## OnlyMyOpinion (Sep 1, 2013)

OptsyEagle said:


> If it doesn't print out for paper returns, I assume it doesn't netfile either. Perhaps I am wrong, but I doubt it. Try to print out a copy of the tax return in pdf and see if you can find it. My bet is you won't, but let us know if I am wrong.


The T2091 form and Principal residence work sheets (PRWS) do print out in the saved pdf copy. 
With TurboTax, during the process of Netfilng it asks if you want to save the return and if you want to save a pdf copy (or print). Before you print a window pops up saying 'you have unused forms open, do you want to close them before printing', I always say 'yes', then it prints out the return and all schedules with a large letter notation across each sheet 'Duplicate do not send by mail'. The T2091 and PRWS are among them.

CRA My Account says the refund will be deposited tomorrow and the NOA posted. I'll provide an update later tomorrow as to whether the NOA says anything.

Incidently, the other tax return I noted earlier where the house has 100% capital gains prints out a return with no T2091, and a PRWS that is essentially blank except for 'is disposition as a consequence of death' (X no), and 'are you electing out of the automatic rollover on disposition to a spouse (X no). 
But Area 4 of Schedule 3 is completed showing the gain (more like 'pain') so the CRA will be getting their pound of flesh and should be happy.

Makes me glad we unloaded our RE holdings. Simple gets better with age.


----------



## OptsyEagle (Nov 29, 2009)

Maybe it is just a studiotax issue. T2091 does not print out on the long copy or the short form copy that goes to CRA. It needs to be printed separately. I assumed that it won't netfile either but who knows. Better they get them twice then not at all.

I did think it was enormously stupid of the tax software preparers to have it filled out like all other forms on a tax return, but not to have it print out with them, without any warning or information pertaining to the issue.


----------

