When there is a change in use from rental to personal, my understanding that capital loss and terminal loss cannot be claimed. How is this reported in Taxcycle that the property was deemed disposed and not sold?
Taxcycle is calculating a terminal loss. Thank you for your feed back
You can claim terminal loss if you change from rental to principle resident.
I think the main concern is the valuation. If you’re reporting a terminal loss, CRA is likely going to want proof that the property value declined that much, and “your opinion” is probably not going to be sufficient. If you have the sale agreement from when you purchased the property and an appraisal as of the year you converted from rental to personal, you should be ok.
Thanks Nezzer
The client has an official appraisal from a realtor. The estimate price is about 10k less than the purchase price. Since depreciation was used, I believe there will not be a terminal loss.
So any expense used after tenant left cannot be claimed? Is there anywhere in T776 that indicates the property was considered to be sold but not sold?
Thanks for your help.
My two cents.. I do know requirements in your part of the country but a realtor cannot provide an appraisal. They can provide an estimate of what they recommend it could sell for.. all letter of opinion or marketing analysis.
An appraisal is a document provided by an appraiser who is accredited.
** I used to work for an accident
Rachel
New Brunswick
***accident should be AACI.. sorry darn auto correct
Rachel Parlee
(506) 874-3093
Can municipal evaluation be used?
I’ve had clients submit realtor’s “market evaluations” and CRA accepted it, or used it to calculate a “reasonable” value. But, don’t bank on that - they don’t HAVE TO accept anything. Actual appraisals are the the most reliable.
@benoit.associes1 I’ve had clients submit municipal property tax assessments to CRA, but they don’t always work in the client’s favor - assessments are often based on the “market value 3-5 years ago” so that value may be higher or lower than what your client wants. And CRA knows this, so they don’t always accept them.
Sorry. It was not appraisal. It was an estimate with market evaluation all documented.
I have had a non-resident sale and a couple of resident sales for estates. In all cases, when CRA asked for appraisal, they only accepted an appraisal from a registered appraiser/association. If I was your client, I would make sure to have this iron clad, if he is claiming a loss. It’s a good investment to pay for a proper appraisal.
I do have an appraisal from a registered association. Thanks for your advice