TAXN201 WK7 L14 Land

Question 1

What is the definition of land?

Answer 1

Land includes any estate or interest in land, whether legal or equitable.
Any estate or interest in land includes all buildings on the land.

Question 2

What are the two steps to determining whether a sale of land is taxable?

Answer 2

1. Determine whether the sale falls within s CB 6A and s CB 15
2. If it does, determine whether there is an applicable exemption within s CB 16 and s CB 23

Question 3

What are the main taxing provisions for land sales and what order should they be looked at?

Answer 3

1. s CB 6 Disposal: land acquired for the purpose or intention of disposal
   s CB 7: Disposal: land acquired for purposes of business relating to land
   s CB 8: Disposal of land used for landfill, if notice of election
   s CB 9: Disposal within 10 years: land dealing business
   s CB 10: Disposal within 10 years: land development or subdividing business
   s CB 11: Disposal with 10 years of improvement: building business
   s CB 12: Disposal: schemes for development or division begun within 10 years
2. s CB 6A: Disposal within 10 years: Bright-line test for residential land
3. s CB 14: Disposal: amount from land affected by change and not already income
4. s CB 13: Disposal: amount from major development or division not already income

Question 4

What are the major exemptions for land sales?

Answer 4

s CB 16A Main home exclusion for disposal within 10 years
s CB 16 Residential exclusion from sections CB 6 to CB 11
s CB 17 Residential exclusion from sections CB 12 to CB 13
s CB 18 Residential exclusion from section 14
s CB 19 Business exclusion from sections CB 6 to CB 11
s CB 20 Business exclusion from sections CB 12 and CB 13
s CB 21 Farm land exclusion from sections CB 12 and CB 13
s CB 22 Farm land exclusion from section CB 14
s CB 23 Investment property exclusion from CB 12 and CB 13
s CB 23B Land partially disposed of or disposed of with other land