Saving on capital gains tax

[len2006]

Hello,

I wanted to find out if there is a way for me to reduce what I will owe on capital gains tax. I borrowed funds from a bank line of credit to purchase half of a condo for my mother; she owns the other half. I paid interest on the line of credit and she lived in the condo as her primary residence (meaning it was never rented out). We have sold it now and since I live in my own primary residence I realize that I need to pay capital gains on the appreciation. Is there any deduction I can take, or is there some way that I can reduce, to lower how much capital gains I need to pay? I am retired.

Thank you

[TurboTaxKim]

As the property you have sold was never used as an "income-producing property" (IE: a rental or business), the interest you paid on your Line Of Credit is not deductible as a current expense, nor can it be added to the Adjusted Cost Base (ACB) of the property to reduce the Capital Gains. 

However, you may be able to reduce the Capital Gain by

1. increasing the ACB with the cost of any additions and improvements you made to the property. 
2. Claiming any Outlays and Expenses that you incurred to sell a capital the property. This includes commissions, brokers' fees, surveyors' fees, legal fees, transfer taxes, and advertising costs.

Please see the following links for more information: 

• TurboTax Blog: Calculating Adjusted Cost Base
• TurboTax Blog: How to Reduce Capital Gains Tax