Hello All,
A client had a condo for 15 years and all these years rented out.
1the ACB: 400,000.00 and the apprised price now is 240,000.00
there are two options: First deemed disposition and claim terminal loss of 160000.00 and claim in the year 2025 .
he just wants to claim the terminal lost but not move in but immediately to put in the market in May 2026.
he needs to recover 26000 his tax payable by claiming terminal loss 2025
the second option: wondering if he can move his business office to the condo and do the deemed disposition and clime the terminal loss .
Apricated if you guys give your advice.
Al
There are a few (to say the least) details missing here:
- why is there a deemed disposition? Did he move in or did a family member do so? Did he ACTUALLY move the business in? (If not either, there is no deemed disposition…just a vacant rental property)
- I assume the intention is to sell the property in 2026. Why not just wait until there is an actual disposition instead of making something up (which is, IMO, what it sounds like he’s doing)? The loss will carry back, and yes, he’ll have to put up the cash for the current year tax owing, but he wouldn’t be doing something that crosses the line into a tax misadventure (for both of you).
“there are two options:”
Personally, I would choose option 3: Complying with the Income Tax Act.
You may find S248 and S45 particularly helpful.