Accountants are often surprised to discover how complex the tax rules affecting principal residences are. Many of these complexities arise when a portion of the home is used to earn income (rented out or used in a business). Complications can also arise where the property is larger than half a hectare or when the owner moves out of the property for work or to live in a care home. Where an individual owns more than one home (such as a summer cottage), the decision to designate one property over another may result in a materially different tax outcome. 

This seminar examines the requirements for a property to undergo classification as a principal residence as well as the concepts of ownership and bare trustees, the ordinarily inhabited requirement, and the placement of housing units on multiple or large properties. Other topics include income earned from a principal residence, the concept of incidental income, change-in-use rules, and partial dispositions or residences held through trusts.

Applicable for:
Although applicable to many professional accountants, this session will particularly benefit individuals who own a principal residence and financial professionals who provide advice to homeowners.

Prerequisites - Knowledge, Experience or Courses
Participants enrolled in this seminar must have knowledge of the Income Tax Act.

Learning Objectives
By the end of this course, participants should be able to:

• Apply the mechanics of the principal residence deduction (including the components of the formula and the year by year designation)
• Apply the definition of the term “principal residence” including the terms like “housing unit” and “ordinarily inhabit”
• Identify the impact of the change in use rules on residences (including partial changes in use).
• Understand the implications when only a portion of a property qualifies as a principal residence (including large acreages and properties used to earn income)
• Interpret the rules when a residence is owned by a trust and the October 2016 amendments in this area

Content
The topics in this seminar include:

• Principal residences and capital property, including the doctrine of secondary intention and implications for house flippers 
• The definition of a housing unit, including trailers and houseboats
• Property owners, including bare trustees
• Conditions that meet the ordinarily inhabited rule, including situations where taxpayers have moved into care facilities
• The designation of a property as a principal residence and the mechanics of the principal residence formula
• Properties used to earn income and the concept of incidental income
• Housing units on multiple properties and properties in excess of one half hectare
• Partial dispositions of a property, including prior subdivisions
• The change-in-use rules, elections to avoid these rules, and implications of filing elections
• Residences held through trusts and the impact of the October 2016 legislative amendments
• The impact of separation and divorce on the principal residence exemption

Seminar Leader: Cindy Desrochers

Presented by PD Partner: CPA Pro

What to Expect

• This is a Live Virtual Seminar where class size has been limited to allow for an interactive learning environment. 
• This seminar will not be recorded.
• Course materials, links and credentials will be emailed to you two business days before the seminar. Once sent, the email will also be found in your Account Communication tab of the CPA Manitoba Member Portal. 
• Live webinars have varying levels of expected interaction, and some may require webcam and microphone capabilities – if you have concerns about the interaction required for this course, please email [email protected]

CPA Manitoba PD Terms and Conditions