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Discussion Starter #1
Hi,

if I have an investment that I am writing off the interest on the debt I used to buy the investment.... whenI sell the investment can the capital gain be claimed by my spouse if it is a joint asset or must it be claimed by myself? My understanding is I must pay tax for any dividends or income if I am writing off interest On my own return. But who has to pay the capital gain tax at time of disposition knowing spouses can transfer between each other tax free? Thx
 

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Spouses cannot transfer between each other tax free. The income from investments must be attributed to the spouse who spent the money to get the investment.

So, if you are the one who borrowed the money to buy the investment (presumably this is so, since you are writing off the interest) then you are the one who owes capital gains tax.

 

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Discussion Starter #3
I should have added more details.. income from the investment is claimed by myself and I write off the cost of borrowing. The investment is in joint names. If I am claiming all interest expense as well as paying the tax on all income from the investment... at time of sale can I put the capital gain on my spouses tax return if the investment has been joint ownership all along?
 

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My understanding is no. The extra details as well as the investment account being joint does not matter.

Tracing who provided the funds for the investment ... or in your case, borrowed the funds is what determines which person reports the income, can claim the borrowing expense (assuming the investments bought are eligible plus the interest is only for the investments) and the capital gains or capital loss from selling.

Everything is determined by who provided the funds. If it was 100% you then only you report everything. If it was 90% you and 10% your spouse then income/interest expense/capital gains or losses would be reported 90% for you and 10% for your spouse.


If you wanted the capital gains to be reported on your spouse's tax return then your spouse should have borrowed the money.


Cheers


PS
Some CMF types don't like having to track which spouse provided the funds so they setup two joint accounts. The first account has spouse A as the first name where spouse A provides all the funds and spouse B has their name on it. The second joint account is the reverse (i.e. spouse B is the first name where spouse B provides all the funds). This way the brokerage does all the bookkeeping for who should report income and capital gains but in the event of death, the benefits of a joint account still happen.
 

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If it is a joint asset (both contributed to the purchase), your spouse should have been claiming their share of the income from the asset all along, as well as their share of the capital gain on the sale.
 

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The wording of the OP suggestions only one spouse borrowed to buy the particular investment in the joint account.

Perhaps this can be confirmed or the details the split of the funds used to buy the investment that was sold.


Cheers
 

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Discussion Starter #7
If it is a joint asset (both contributed to the purchase), your spouse should have been claiming their share of the income from the asset all along, as well as their share of the capital gain on the sale.
It is joint but one contributor, therefore the contributor pays the tax- it doesn’t get split
 

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I should have added more details.. income from the investment is claimed by myself and I write off the cost of borrowing. The investment is in joint names. If I am claiming all interest expense as well as paying the tax on all income from the investment... at time of sale can I put the capital gain on my spouses tax return if the investment has been joint ownership all along?
I guess I was unclear, but what my message was intended to say was no, you cannot do that.
 
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