Using the deferred option to pay a capital gain
I owned two town houses that I gave to my two children some 5 years ago. I had to pay capital gains tax on the increased value of the two units from the time that I originally bought them. To reduce the immediate cost of the capital gains tax, I chose to use a 5 year option to pay that off, one year at a time. This was offered on the CRA process. The Turbo tax method for doing that was rather unknown to most advisors and each year, I seemed to have to explain that 5 year deferred tax scheme to the various CRA and even Turbo tax contacts that I dealt with. Often the information provided was not consistent from these various people and I was never sure exactly how the system really worked. Even now, in the 5th year of this tax deferral process, ending the tax payments, the answers I get using the online version of Turbotax do not seem to correspond to what CRA wants.
Has anyone used this capital gains deferral option? How has it worked out? Any advice to provide would be appreciated.
- Jake Cole
