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| *The Commerce Journal>>>Canada Taxes |
I got some money from my mother this year, after she sold her house, it is part of my inhertience.? |
I would like to know if I have to pay tax on this money, It was quite a large amount, someone said we have to pay 10% tax. Can our parents not give us gifts? Your mom would have to be deceased for it to be your inheritance. If she's alive, it's treated as a gift to you, and gifts are not taxable to the person who receives it. Your mom could gift up to $12,000 per person per year without having to file a gift tax return. If she exceeds that amount she needs to file a gift tax return, but has a $1,000,000 lifetime exclusion she can use against yearly gifts in excess of the $12,000. Oops, sorry, didn't realize this was a Canadian tax question. It was in open questions and I figured it was an easy answer. Please disregard my answer, but I would think that Canada should treat your situation similar to the US treatment. If it was a gift, it is not inheritance. You do not have to pay taxes on a gift as far as I know. This is the type of question that should never reach the intenet. If you mother gave you money then it is simply that. Your mother is smart enough to tell you that it is your inheritance, not us. We have no way of knowing that. She sold her house, so the money is hers to do as she pleases. If you are that confused, send it to me! Your mom is alive, if she wants to gift this money to you it is hers to do with as she wants. I think, personally this is a great way to pass on the wealth here in Canada, because it is a gift it's not subject to any tax. As a precaution, I would document where the money was deposited and why, but it should never be a tax issue. For further information just check out the CRA website, it will be able to answer your questions and should clear up any misinformation you are being given by those who don't really know the answer. http://www.cra-arc.gc.ca/menu-e.html... Yes, your mother can give you a gift. It is not taxable to you, nor would it have been taxable in your hands if she were deceased. I'm assuming that when she sold the house it was her principal residence, which she would have been able to sell and claim the principal residence exemption (reduces capital gains on the sale to zero). Just like any other assets you have, if the money earns interest, or ends up invested in capital property and subsequently has a gain, then you'll pay tax on that income, but not anything else. There are some income attirbution rules that would apply if you were a minor (which she would have to pay, not you), but otherwise, there shouldn't be any tax implications for you. |
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