A taxpayer purchased a home with their now ex-girlfriend in 2020.
Unfortunately, things did not work out. They parted ways and sold the home in 2022.
The taxpayer moved back in with his parents.
I am completing the T2901 and entered:
Address
Year of acquisition
Proceeds of disposition
I entered 3 (three years) on line 1 of the form (number of tax years ending after the acquisition date).
The information is entered on Schedule 3, as well.
Is there anything else that needs to be addressed?
Small side note: I completed this form in taxprep a few years back (my old software) and noticed a percentage held by: area on the form which I do not see in taxcycle. I guess it does not matter because there is not a taxable capital gain anyway.
I am entering 50% in that cell but getting an override notification.
The software is not splitting it with a spouse/partner cause he doesn’t have one.
I think the override would be appropriate - it WAS his spouse or common-law partner with whom the proceeds were split. It’s just that as of Dec 31, that person was no longer his spouse, so you had to remove the spouse’s information from the Info page in TaxCycle. Because there is no spouse info, TaxCycle warns you when you enter something that pertains to a spouse.
The warning doesn’t mean, “This is wrong for tax filing.” It is just TaxCycle’s way of saying, “Spouse?!? What spouse? I don’t know anything about a spouse!”
You know more than TaxCycle does. Tell TaxCycle not to worry about it - by signing off the warning message.
@Nezzer
Property sold for $800k
Only thing about overriding the % of ownership cell in S3 is it doesn’t adjust the proceeds of disposition in the T2091. So the proceeds of disposition will stay at $800k.
Whereas if I enter 50% in the 3rd party area like @Arliss mentioned or 50% in the spouse cell the proceeds of disposition adjusts to $400k in the T2091.
In your original post, were you not saying that you had to override that “% owned by spouse” cell? Now you’re saying you DON’T have to override that cell? What cell were you overriding? Sorry, I don’t understand.
My apologies for the confusion. I did not communicate everything.
To clarify, the software was defaulting 100% to the husband (because his marital status is single) for which I changed his percentage to 50% via the override but I left the spouse(WIFE) / 3rd party cells blank.
Should I enter 50% in the spouse cell as well (even though he no longer has a spouse)?
Either enter 50% in the spouse cell OR enter 50% in the 3rd party cell - not both. You could argue that either of these is correct. Depends how you look at it. If TaxCycle warns you about that there is no spouse, sign off the warning.
