Am I able to claim principal residence for inherited home? Effective exactly when? And will ppl res still apply if renting it out? Thx.

[shayla1]

1.)  Am I able to claim Principal Residence?  Context: My brother and I inherited our father's home when he passed away April 2017.  Now in August 2018 the home has finally legally been transferred to both our names, 50/50.  The home has been empty for the past year.  We will not sell it; assumption is we will not owe capital gains since we're not selling.  I will move into home in two years but I spend time there off and on (eg) vacation and some weekends.  I live and work and rent an apartment a couple hours away.  (My brother owns his own home separately which is his principal residence so he can't claim another.)  (Other: For the 2018 property tax year, I didn't claim principal res since it wasn't yet in my name.  I believe we can apply to get at least a portion of the prop tax back as principal residence--do you know, is this correct?)

2.) Chances are we will rent the home out for parts of the next 2-year period before I move into it.  (a) Can it then still be my principal residence while renting it out if answer to #1 above is 'yes' for ppl res?  (b) Assumption is we need to declare rental income. 

[TurboTaxBrenda1]

Yours is a question that's best answered by the Canada Revenue Agency. Because you won't be living in the inherited home while it's being rented (i.e. not just renting a portion of the home while living there), CRA may view this as a complete change of use meaning capital gains will apply.
Your rental income will be taxable of course but for the Principal Residence issue, your best bet would be to speak to CRA directly.

https://turbotax.community.intuit.ca/replies/2647704

[shayla1]

Thank you Brenda.

[TurboTaxBrenda1]

You're welcome