Tax & Estate Planning Frequently Asked Questions

Some questions asked by our clients:

Will The CRA Audit Me? How can individuals reduce their chances of getting audited by the CRA?

Real Estate transactions are one of the most common targets for a CRA audit. This has been the case for several years, especially in the Greater Toronto and Greater Vancouver areas. 

To reduce your chances of getting audited, maintain ownership of the property for more than 12 months and ensure that you correctly classify the property’s main purpose and report accordingly.  

What might trigger a CRA audit?

Many things can trigger an audit or make one more likely to occur.  

For real estate transactions, the following are the main factors:

1. The number of real estate transactions conducted

2. The period involved between the purchase and sale of the property

3. Whether any gain was realized and/or declared on your tax return

4. The type of gain reported

What do I do if I get selected for an audit?

The CRA will typically start an audit of your real estate transactions by sending you a letter with a questionnaire attached. 

How you answer these questions will have an impact on the outcome of the audit. 

Do not respond in writing to the CRA regarding your real estate transactions until you have consulted a tax professional, someone experienced with CRA audits and auditors.


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We have answers to all your questions in regards to CRA Tax Audit, Tax Debt, Deadlines, Penalties and Interest, Income or Capital?, A Second Property?

Tax & Estate Planning Questions