Question: “I invested in a building in Europe in 1988 and disposed of it back in 2002. Is it possible to claim the lifetime capital gains exemption on this transaction?”
The capital gains exemption may only be claimed on the disposition of qualified farm property, qualified small business corporation shares, or qualified fishing property. In this case the property disposed of would have to have been qualified small business corporation shares. To qualify, the shares would have to have been of a Canadian controlled small business corporation, which, at the time of disposition, uses 90% or more of its assets either directly in an active business carried on in Canada or as a holding company for such a corporation. The shares would must have been owned by the taxpayer, the spouse or common law partner, or a partnership related to the taxpayer. Finally, the shares must not have been owned by anyone else in the preceding 24 months before disposition.
Given the assets were employed in Europe, the capital gains exemption would not have been available.