Transferring oversea personal property to my company (incorporated IT)

Leveraging, renting vs owning, making an investment or buying a home?
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PF4FR
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Transferring oversea personal property to my company (incorporated IT)

Post by PF4FR » 20 May 2017 13:47

Hi guys

My wife owns a condo overseas
She would like to transfer this condo to our Inc. (Incorporated IT professional) and to start renting it.
I think that this falls under Transfer of a property to a Corporation under Section 85 ( http://www.cra-arc.gc.ca/E/pub/tp/ic76- ... 9r3-e.html )

Here is how what we understand and what we don't understand in this:

Let's say the property overseas now worths 90000CAD.
The property was purchased 20 years ago
For Canadian tax purposes how do I calculate the Adjusted Cost Base? Do I factor in the inflation?
Since she has owned the property long before she entered Canada I guess the Adjusted Cost Base for Canadian Tax purposes must be calculated from the moment when she became Canadian Resident (she was on a tourist visa for an year till her application to become resident was approved)

Having that ACB calculated we can now transfer the property (sell it) to our corporation
I must say that the property lost value since then so then there will be no appreciation and no tax rollover using Section 85.
It will be just a sale and purchase for my wife, respectively our corporation

Is the above reasoning correct ?

Thanks
PF
Last edited by PF4FR on 20 May 2017 23:07, edited 1 time in total.

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kcowan
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Re: Transferring oversea personal property to my company (incorporated IT)

Post by kcowan » 20 May 2017 18:17

I don't understand why you do not transfer it at FMV. You will owe taxes in the home country.
For the fun of it...Keith

PF4FR
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Re: Transferring oversea personal property to my company (incorporated IT)

Post by PF4FR » 20 May 2017 22:52

Actually I will. I did not say I won't. My impression was that I must calculate the ACB
The property value went down.
The real cost will be difficult to calculate in the origin country in the absence of a data base that shows the evolution of the prices
There the transactions are not monitored like here. You still need papers to sell a property but there was no national or regional database.
I am more worried about what happens at this end

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