Tax On Sale Of Rental Property

Question

A client has a rental property. There are two houses on the land, offering a home and income situation. He has rented for 4 years. He now plans to split the property into two titles, and sell the house. I assume he is not liable for income tax for changing the title and sell as it was a rental investment property?

Answer

As long as the intent at purchase was to hold the property as a long term investment and no major development work has been undertaken then any gain on sale should be capital in nature. Assuming the Brightline Test does not apply.