Personal Tax Handbook - Principal Residence Exemption

This is the third module of the Personal Tax Handbook covering tax issues related to principal residences and the Principal Residence Exemption (PRE). This is the second of two modules examining the state of taxation in real estate in Canada by looking at the last remaining lucrative tax haven for Canadians, the PRE, and their principal residences. Module 2 in this series covers rental income and deductions. Both areas are heavily scrutinized and audited by the Canada Revenue Agency (CRA). Each course takes an in-depth look into the most frequently encountered situations and questions in personal tax preparation. The course follows a two-stage teaching approach to give practitioners the tools required to file tax returns and advise clients on critical tax reporting and compliance matters. These stages are:

1. Preparation Tips, Tricks & Traps – Best practices, overviews, and methodologies on reporting and completing the tax return, covering areas often overlooked or misunderstood by many practitioners.
2. Tax Advisory & Problem Solving – How to deal with common and tricky situations without easy answers. CRA guidelines and various court cases are analyzed and presented to help formulate a defensible filing position.

This seminar will cover topics including:

• An overview of the existing tax landscape and recent changes in reporting the sale of principal residences. See how one small reporting requirement is making a huge impact on the reporting and planning behind the application of the Principal Residence Exemption.
• Are you applying for the Principal Residence Exemption properly? Are you getting the most bang for your client's buck? This segment looks at filling out and filing the T2091 accurately and ensuring your client fully uses all elements of the PRE formula.
• What qualifies as a principal residence? This module examines properties that can and cannot qualify as principal residences, the tax implications of selling a cottage property, and the importance of keeping track of the adjusted cost base of all properties to minimize future tax.
• Understanding the challenges and audit issues taxpayers may encounter when disposing of a property or several properties in a short period. CRA auditors are reassessing many real estate transactions as business income where the PRE was originally claimed, resulting in huge reassessments, penalties, and headaches for you and your client.

Also provided is a unit on practicing safe real estate tax for your practice. This section applies the course concepts to offer best practices and practical approaches to implement in your practice today to deal with clients and the CRA. Given the increasing complexity of tax legislation in Canada and the aggressive nature of CRA auditors, it is crucial to formalize procedures and best practices in our businesses to deal with these situations and protect ourselves by lowering tax practice risk.

This seminar is frequently updated with changes in legislation, CRA documents and guidelines, and relevant court cases. Developed with the tax practitioner in mind, it will be a valuable resource in your personal tax preparation practice. With the growing complexity of the Canadian tax landscape, it is more important than ever to understand how the CRA is assessing and applying existing tax laws. Join us for this in-depth seminar and master the area of rental income and deductions when preparing T1 tax returns for your clients.