Why should I get an appraisal done on my income property ?
1. Subject: Capital Gains Appraisals
"Hi Tim,
I had a couple questions for you regarding capital gains for income properties. Who would request an appraisal for capital gains calculations when it comes to income properties? Would that request come directly from the CRA? Or is that something that is recommended by accountants? Trying to get a feel if these appraisal requests are pretty common. Thanks again."
Typically an appraisal like this is recommended to get a handle on what the potential Capital Gains will be on a property if sold, or if transferred ie, in an estate or tax plan. I could see this being a good market for sure.
Sometimes we want to justify a higher price and sometimes a lower price depending on the goals and objectives of the plan. So having a range is pretty important. CRA typically does not request this unless they are looking for a 2nd or 3rd opinion. Having the info for planning purposes is very helpful when giving advice for this. Sometimes people will get a realtors opinion on it as well, so they could be a potential niche market for referrals, helps them reduce some liability and gets that job off their to do lists.
Those are my main thoughts on the matter, if I can think of anything else I will let you know. Also happy to answer any questions you may have about it, even a sounding board if you like, I would be good for that.
One other thought, it would be great if the appraisal disclosed purchase info of the property, peoples memories are not always the best, if it’s in the appraisal, those mysteries are resolved and helps establish some cost basis for tax purposes, will not be all of them, but a basis just the same. I see that being very useful, as those numbers will reveal clues to how much depreciation may have been claimed in the past, potential mismatches to values on the tax return, etc. and that will be useful and provide confidence in the estate planning process.
Hope that helps
TLR
PS: I am sure there is some great articles writen about this, as I find them, I will post them in the comment section
