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Mr T would like guidance with his dilemma. He owns a house in Toronto, which is in his name. He purchased the house in 2006 for $170,000. The house is now worth $450,000. His wife owns a cottage in Muskoka, which is in her name. She purchased the cottage in 2008 for $50,000. The cottage is now worth $200,000. Prior to 2006, neither Mr or Mrs T owned any properties. Mr and Mrs T were married in 2011. Mr T is being transferred to Vancouver BC. Therefore, he and his wife have decided to sell both the home and the cottage in December 2020.
Required:
Explain the rules to Mr and Mrs T with respect to the tax implications arising from the disposal of the properties.
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