Selling a Rental Property and Tax Implications?

[Twin_Cam_Turbo]

So I sold my rental last spring and I’m getting ready to do my taxes. The home was my primary residence purchased new in October 2013, rented partially from October 2013-February 2015 when I lived in it and then a full rental from March 2015-March 2021, finally sold unoccupied in May 2021. I never claimed any capital cost allowance on previous year taxes, never owned other property at the same time and included the rental income minus condo fees, mortgage interest and property tax each year on my income taxes. The home sold for ~$10k under what I paid new. My question is should I be trying to claim the loss somehow on my taxes or just don’t bother? Do I even need to report anything other than ticking my final year of rental box and the first three months of income minus expenses?

[J-D]

This is my basic understanding, but I still my have my rental and haven't sold it yet so I'm interested in someone who actually knows. The tricky part is that (assuming you owned another property as your principle residence at the same time), it's not based on what you paid for the condo when it was new, it's the fair market value from Feb/Mar 2015.

[Twin_Cam_Turbo]

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This is my basic understanding, but I still my have my rental and haven't sold it yet so I'm interested in someone who actually knows. The tricky part is that (assuming you owned another property as your principle residence at the same time), it's not based on what you paid for the condo when it was new, it's the fair market value from Feb/Mar 2015.

If that’s the case then I’d have a huge “terminal” loss as the home was probably close to peak then in value.

[suntan]

Property was under your name? Then yes you can claim a loss against your taxes. See, your financial incompetence finally pays off!

Confirm with your accountant on this though.

[msommers]

The cost base is for when you changed it from a primary residence to a full rental. Example, you paid 400K, was assessed at 350k when you started renting, sold for 300k. Your capital loss, against capitals gains (investments or sale of rental or vacation property) that you could claim is 50k.

[Twin_Cam_Turbo]

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The cost base is for when you changed it from a primary residence to a full rental. Example, you paid 400K, was assessed at 350k when you started renting, sold for 300k. Your capital loss, against capitals gains (investments or sale of rental or vacation property) that you could claim is 50k.

So in my situation I paid $257k in October 2013, but rented my spare room out immediately from November 2013 to February 2015. In March 2015 I moved out and rented the whole unit until March 2021. I then sold the home unoccupied in May 2021 for $247k. I never elected to tell the CRA I moved out in 2015, which online it says I should have told them? I also rented it partially from day 1 and thus reported all my rental income and main write offs to them since purchase. Seems like a large can of worms to open it I want to claim some losses. No CCA was ever claimed. Do I just report it as sale of primary residence on my taxes otherwise if I don’t want to open this can of worms?

[JRSC00LUDE]

Why would you not just use a tax accountant for something like this so you get it right?

[ShermanEF9]

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Why would you not just use a tax accountant for something like this so you get it right?

+1. Pay someone a little to take away the headache.

[Twin_Cam_Turbo]

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Why would you not just use a tax accountant for something like this so you get it right?

Right now it’s cost, I lost my job this week and they want a large sum to do my taxes because I’m “self employed”. I just need to know how to report this, I don’t care if it benefits my tax return.

[kenny]

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Right now it’s cost, I lost my job this week and they want a large sum to do my taxes because I’m “self employed”. I just need to know how to report this, I don’t care if it benefits my tax return.

You should call CRA and ask what should be done, and then report back.

[haggis88]

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Right now it’s cost, I lost my job this week and they want a large sum to do my taxes because I’m “self employed”. I just need to know how to report this, I don’t care if it benefits my tax return.

What software do you use?

I've not had this particular situation to deal with, but have used StudioTax ever since I moved to Canada and have found the wizard function to be quite useful for things like this.

It's not free anymore, but it gives you 20 returns for $15, I haven't used all of mine, would be happy to send you my activation code and let you do yours

[Twin_Cam_Turbo]

I think I just need to do a T2091 to designate that the property was once my primary and then changed to a rental at CoC assessed “value” in 2015 then file a regular capital loss/gain form based on the “value” of the home in 2015 and the price it sold for in 2021. CCA was never taken and thus doesn’t need to be added in.

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What software do you use?

I've not had this particular situation to deal with, but have used StudioTax ever since I moved to Canada and have found the wizard function to be quite useful for things like this.

It's not free anymore, but it gives you 20 returns for $15, I haven't used all of mine, would be happy to send you my activation code and let you do yours

It’s all good, I’m using turbotax and already had the code for it, but I appreciate the offer.

[90_Shelby]

The timeframe that you rented out a room but still lived there is irrelevant to the tax situation, it can be disregarded. As others have stated, it's the change in value from when you moved out and then sold. Use your property tax assessment or have your realtor pull comparable from that time period when you moved out. A lot of people get an assessment by the bank when they move out if you also pulled equity, but that may not be the case for you.

If you mess up the process, maybe you'll get audited, just run with it and cross your fingers.

[ExtraSlow]

Just yeet and yolo that's that my wfg guy says.

[gwill]

I sold one of my rentals a year and a half ago. The loss your wanting to claim can only be used in later years against another investment property.

I paid someone to handle it for me but in the end you can't use your loss on a rental to offset other investments or your income. I can use it to offset appreciations in later years for other rentals.

It was a bit surprising and for anyone who won't have another rental almost becomes pointless.

[suntan]

Looks like you can claim the less against any rental income.

Since rental income was zero, you will have negative rental income and thus save money.

Accrual for the win.