How do I Report the Sale of my Principal Residence Turned Rental? I purchased “Home A” in May 2009 and lived there until August 2017. I moved to “Home B” in August 2017 and kept “Home A” as a rental (one family rented it and I reported rental income on my tax return but did not claim any CCA). I …

You’re reading this wrong. When filing any forms electronically (netfile, e-file, etc), the information on the forms gets transmitted to CRA but CRA doesn’t have the signatures to go with it. When CRA sends a letter asking for the signed forms, they now want to see the signatures. For examples, as …

Once again, very helpful, thank you so much for your time!

[image] krobertsonk: How do I calculate my gain for schedule 3 in this specific case? There is NO GAIN to report, unless you sold the home in 2018 or later. [image] helga_spence: Legal fees and land transfer taxes are considered part of the FMV. When the house is sold (at some point i…

I strongly suggest you should see a professional accountant as you may be much better served by filing a late 45(2) election. Then no deemed disposition and the home could be considered your principal residence for 4 additional years if you choose… that’s IF they accept the late 45(2) election.

[image] Nezzer: Alternatively, the gain could be calculated using the PRE formula: Is that an option? I would have thought no based on the facts (change in use to rental) but would be glad for that to be an option if you are correct.

@Arliss It has always been an option - the formula is specified in ITA 40(2)(b): Income Tax Folio S1-F3-C2, Principal Residence - Canada.ca This Folio Chapter provides tax professionals and individuals with a technical overview of the Canada Revenue Agency’s application of federal inc…

I believe 2.48 - 2.52 is more relevant.

Well, that’s if you want to delay the change-in-use date. And, during the 4 years covered by the 45(2) you can’t have another property designated as a principal residence. If you have BOUGHT another house, you have to decide which one to designate as your principal residence for those 4 years. Bu…

So a late filed 45(2) election and then the PRE calculation is what you were suggesting and not just the calculation at this point.

@Arliss No, @krobertsonk did not say that the house was sold, so there is no need to calculate a PRE yet. That may happen in the future. And, late-filing a 45(2) is an option, but if the client bought a new house, they may not WANT to designate an additional 4 years to the rental house, because t…

How do I Report the Sale of my Principal Residence Turned Rental?

Tax Topics

Nezzer April 25, 2023, 11:25pm 17

@Arliss
It has always been an option - the formula is specified in ITA 40(2)(b):

In that folio, see paragraphs 2.17 - 2.20

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How do I Report the Sale of my Principal Residence Turned Rental?

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