It is February 1^st of 2021 and Logan and Brook have come to you for assistance with their 2020 tax return. They are a married couple and have two children. Logan works full-time and Brook is a graduate student. Logan earned $90,000 in 2020. They ask you the following two questions:

1. What was our residency status in 2020?

Logan and Brook and their two children, aged 12 and 7, returned to Canada in January of 2021 following an eight-month sailing trip in the southern hemisphere where Logan was performing oceanic research for work. Logan has worked for the same company out of the Vancouver office for twelve years.

Since the family only resided in Canada for the first five months of 2020 (totaling 151 days), they are wondering if their residency status has been affected.

2. If we sell our home and cottage, how do we know which home is the principal residence?

In addition to their family home, the couple owns a cottage which they usually visit in the summer. They are considering selling both properties this year (2021) and moving to New Zealand. Their family home originally cost $150,000 and is now valued at $300,000. The cottage costs $160,000 and has a current market value of $260,000. The couple has owned the house for ten years and the cottage for five years.

Required:

1. Inform the couple’s question regarding their residency – ‘Does the fact that they were only in Canada for 151 days in 2020 affect their residency status?’

2. Address the couple’s question regarding principal residence, calculating the number of years that each property would be designated as the principal residence if they were to sell both homes this year.