Principal Residence sold at loss

Here’s one for the legal minds in the group.

If a person looses money on the sale of the principal residence, is it obligatory to declare the property as principal residence and loose the capital loss?

I think subparagraph 40(2)(g)(iii) would come into effect.

That is, the property that is used as primarily as a residence, for the personal use and enjoyment of those living in it, would be considered Personal-Use Property. And the loss on such disposition would be deemed nil.

I wouldn’t think so. Personal use property is stuff that normally depreciates - cars/collectibles etc. Real estate would not be personal use property.

"personal-use property of a taxpayer includes
(a) property owned by the taxpayer that is used primarily for the personal use or enjoyment of the taxpayer or for the personal use or enjoyment of one or more individuals each of whom is

(i) the taxpayer, …"

Perhaps, Laurie, you are arguing that the person just absolutely hated his residence, did not enjoy it for one second, and camped outside of it because he hated it so much he could not bring himself to use it? :slight_smile:
IMHO, whether it was tight money or loose money, it was still a loss deemed to be nil for tax purposes…


You’ve just made me laugh out loud in the office. Thanks. Every one was thinking I’d finally lost it.

@joe.justjoe1 Joe, your comment gave me a great chuckle during this crazy time.