Capital Gain Appraisals
Appraisals can be beneficial for tax purposes, especially when property is sold during a fiscal year by an individual or a corporation. When you sell capital property like stock shares and real estate property for more than you bought it for (the “adjusted base cost”), the proceeds that you make from selling it are called capital gains.
At the end of each year (or fiscal year), you’ll add up your capital gains and losses, and include that amount with your yearly earnings. In many cases, this is a fairly straightforward procedure. However, in some cases, it’s crucial to use an accurate, certified appraisal to satisfy the Canada Revenue Agency (CRA) when you have capital gains on your annual tax return. When you need to be absolutely sure, you can turn to Appraisal Hub Inc. for accurate capital gains appraisals
What are Capital Gains?
There are some assets that the government considers capital property, namely stocks, investment shares, and real estate. Stocks and similar assets are relatively simple. You (or someone who you inherited them from) bought shares for a certain price on an exchange. When you sell those shares, it’s simple to calculate the difference in the purchase price and the sale price and use that amount on your annual taxes.
Many real estate gains are straightforward as well. If you buy a home and then sell it five years later, the profit you made on the sale is the capital gain you have to report. In Canada, you’ll report 50% of your net capital gain for the year as income, subject to the same tax rate as the rest of your income. When you’ve been given or inherited property, that’s when the value of the property comes into play in the context of capital gains.
Why Would an Accurate Appraisal Help?
Let’s say you inherit property as part of an estate. In some cases, an immediate sale of this property excludes you from claiming the proceeds as a capital gain. In most cases, you’ll have to add half of these proceeds to your income.
The problem is that you only have a record of what you sold the property for and not what was originally paid for the property. With capital gains, you have to calculate the profit of what you sold property for in comparison with the price you paid to acquire it. But in this case, you didn’t buy the property in question—it was passed down to you.
An Accurate and Detailed Report
CRA guidelines say that in this situation, you need a full-service appraisal carried out on the property to avoid further complications. This is where we come in. Appraisal Hub Inc. in the Greater Toronto Area can provide a full-service, accurate, and retrospective picture of how much the property would’ve been estimated in value for when it was purchased. We’ll also generate a detailed appraisal report so that you can show how the appraisal was carried out if the CRA needs further proof to be satisfied.