Real Estate Situated Outside Canada Given by Parents

[FilCan]

My parents-in-law (naturalized US Citizens, currently living in the US) decided to subdivide their remaining real estate holdings in the Philippines to their children, so that it falls under the category of gift (will this be a correct assumption?). It is now in the process of having all the land titles transferred to appropriate parties.

The properties are idle farm lands which are non-income generating at the moment.

a. Should this property be declared in my spouse's (her portion) tax return?
b. Will it also be right to assume that the value of the property be based on the date the land title has been transferred to her name?
c. Is the government (Philippine government) assessed value the appropriate basis for valuation?
d. If she decides to sell the property, what are her tax exposures?

Appreciate your assistance.

 

[Johnboy]

My parents-in-law (naturalized US Citizens, currently living in the US) decided to subdivide their remaining real estate holdings in the Philippines to their children, so that it falls under the category of gift (will this be a correct assumption?). It is now in the process of having all the land titles transferred to appropriate parties.

The properties are idle farm lands which are non-income generating at the moment.

a. Should this property be declared in my spouse's (her portion) tax return?
b. Will it also be right to assume that the value of the property be based on the date the land title has been transferred to her name?
c. Is the government (Philippine government) assessed value the appropriate basis for valuation?
d. If she decides to sell the property, what are her tax exposures?

Appreciate your assistance.

a. Probably. Definitely if valued over CDN $100000
b. Probably
c. Most likely
d. Capital Gains Tax on the increased value in CDN between being gifted the property and selling it.
This can be a bugger simply based on currency rate fluctuations.


You need to seek professional advise. The CRA and the penalties it can levy are quite draconian.

 

[wyho007]

Re your question c, I think it's best to pay an independent evaluator to issue a valuation report. That will save you a lot of headaches when capital gains is realized years later.

My parents-in-law (naturalized US Citizens, currently living in the US) decided to subdivide their remaining real estate holdings in the Philippines to their children, so that it falls under the category of gift (will this be a correct assumption?). It is now in the process of having all the land titles transferred to appropriate parties.

The properties are idle farm lands which are non-income generating at the moment.

a. Should this property be declared in my spouse's (her portion) tax return?
b. Will it also be right to assume that the value of the property be based on the date the land title has been transferred to her name?
c. Is the government (Philippine government) assessed value the appropriate basis for valuation?
d. If she decides to sell the property, what are her tax exposures?

Appreciate your assistance.