Are Gifts Given to Family Members Taxable to Them?

Allan Madan, CA
 Sep 9, 2014

Taxation on gifts to family members can be tricky. Usually the recipient does not have to pay taxes but the person who gives the gift might face personal taxes. There are a couple of tips that you can take to minimize or avoid taxes such as not giving gifts that can increase in value.


You are probably asking yourself are gifts given to family members taxable. Family members do not pay tax on gifts received. However, the person giving the gift could be subject to personal taxes. This is because the Canada Revenue Agency treats property gifted as being sold for its fair market value. If the property has gone up in value, a taxable capital gain will be included in the income of the person giving the gift. Here are two valuable tips:

First, don’t gift property that has gone up in value because that could trigger taxable capital gains. Second, gift stocks, bonds, mutual funds, and real estate to your children if a) you have recently purchased a property and b) you expect the property to go up in value over time.

When your child eventually sells the property, any profits and gains will be included in your child’s income. Because your child is likely in a low tax bracket, the profits will not attract a lot of tax.

Remember these two tips when giving anything to family members.


The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.

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  1. If I am joint owner of a Mobile home with my mother, and she dies, I am now sole owner (right of survivorship)…

    1. When I sell said Mobile,
    Is ANY or ALL of INCOME from sale called Capital Gain ???
    2. This home is my mother’s PRINCIPAL resident,
    Does that mean : 1/2 of Sale is Capital Gain to me ??
    3. The Pad rent, Hydro, Insurance premiums paid, Sewer and Property Tax , all need to be PAID until property (Mobile) sells.
    Are these items DEDUCTIONS off of the Capital Gain ??

    1. Since the mobile home was your mother’s principal residence, you do not have to pay capital gains tax if you sell the home for what it was worth (market value) on the date of her death. If you sell it for more, then the difference (i.e. sales proceeds less market value on date of death) will be treated as a capital gain. One half of the capital gain will be included in your income in the year of sale.

      The carrying costs for the home that you paid for are non-deductible.


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