Capital Gains

[Bellbaby]

Hi everyone,

I know I've pasted somewhat similar to this previously. I have a long motion tomorrow. I am using case law cited on here to try to obtain costs as a self rep.

I am also going to attempt to argue capital gains. I'm in search of case law and running into a bit of trouble.

My respondent owned his primary residence (with a tenant in the basement), a second residence (with two separate families as tenants) and a cottage property.

He disposed of the cottage property. He asked one set of the tenants in the rental property to leave and evicted the others. He owned this rental property for three years. He then made improvements and sold the rental property for a profit of $200k (after mortgage paid).

I am going to try to argue that this rental property was bought with the intention of being a second income, then sold at a large profit instead. If we were in the same home, the surplus of income would benefit the child. In addition he has the option to now invest that money and profit from any further gains.

My respondent has not filed his financials so the motion had proceeded without notice, for tomorrow.

Any thoughts?

[dinkyface]

""rental property was bought with the intention of being a second income, then sold at a large profit instead"
The original intention is irrelevant. He can make up any reasons why the sale was justified. Non-arguable.

Relevant fact is that he has a one-time income from the sale (which may be well under $200 after taxes), and then potential investment income ongoing.

See here https://www.canlii.org/en/on/onsc/do...&resultIndex=2

From the above, it seems that as per CS guidelines, the court has full discretion on whether to include the non-recurring capital gain as income for CS.
In this case they also added 3.3% of the sale proceeds onto the income for CS going forward each year. So, if the net proceeds after tax is $150K, then you're adding $5000 to income for CS each year going forward.
Personally I cannot see adding the profit to income for that one year of CS IF you add the 3% yearly. All he has done is change the asset from real estate to liquid, and is still deemed to be earning income from it.

[Bellbaby]

Thank you!!