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Financing, Mortgages and Insurance What options are best for you and your situation?


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Old 2011-03-12, 01:56 PM
jane22 jane22 is offline
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Default Delayed Closing reimbursement tax exempt?

I received notice my home will not be ready by its original firm closing date and I have received a new extended closing date.

I believe I will be entitled to apply for delayed closing reimbursement through Tarion once I close, if I receive payment will I need to claim it on my taxes? Will I have to pay tax if I do need to claim it?

Thanks for any advice you can offer.
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Old 2011-03-12, 10:16 PM
Mark & Lynda Mark & Lynda is offline
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I believe any income you receive would be taxable under CRA rules. There are only a few examples of income that is not taxable which can be found on the CRA website.
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Old 2011-03-12, 10:18 PM
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..and your accountant and lawyer would be better suited to answer this question with authority.
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Old 2011-03-12, 11:42 PM
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I received delay closing compensation for my house which closed in 2010. I am currently completing my tax return and have been told this is not taxable as it is not considered income, rather a refund of a portion of the purchase price. This makes sense to me but I am curious if you (or anyone else) are told otherwise.
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Old 2011-03-13, 12:02 AM
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I'm no expert but I think if you don't get a T4A for this compensation then you don't need to claim it on your taxes.
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Old 2011-03-13, 06:40 AM
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this is compensation for out of pocket expenses - no tax implications
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