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Handing down the family cottage |
(NC)—How do you ensure that the family cottage stays in the family?
"Protecting the family cottage is an important consideration in many estate plans," says Chartered Accountant Karen Yull, tax principal with Grant Thornton LLP in Toronto.
"One strategy is to set up a trust. This way, you can maintain control over what happens to the property. Capital gains tax must always be considered. Many people who own more than one property don't realize that they may have to pay capital gains tax on the property when it is sold."
In most cases, a transfer to a trust is deemed to be a disposition at fair market value. "If you or your spouse are over 65, putting the cottage in an alter-ego or joint spousal trust allows you to transfer the property to the trust at its cost, as well as avoid probate fees. In Ontario, probate fees are among the highest in the country."
"Proper tax planning is needed to minimize tax."
For further information about taxes, contact a Chartered Accountant.
Credit: www.newscanada.com |
