Rental income - Disposition of real estate
If you have disposed of rental property in the tax year, please
follow the steps below:
1. On the "Left-side menu on the Interview tab", select
"Interview setup".
2. On the screen that appears on the right, go to the "Rental
income" group, check the box for "Rental property
income", and click "Next" at the bottom of this
page.
3. On the "Left-side menu on the Interview tab", click on
"Rental Income", and on the new page that appears to the
right, select "T776 - Rental income property".
4. A page will appear on your right, entitled "T776 - Rental
property identification". Complete this page. You must
specify the exact date of the sale of the building, which
corresponds to the end of the fiscal year of this rental
property, and, once the relevant information is entered, click
"Next" at the bottom of this page.
5. On the "Rental property income and expenses" page will
appear on your right. Remember to check the box indicating
that this is the final year of operation. Subsequently, enter
the income and expenses.
6. On the "Left-side menu on the Interview tab", under
"Rental Income", click on "CCA". You must choose the
depreciation category that corresponds to the rental property. By
clicking on the category selected, a new page is generated on the
right. You must complete it properly, by making sure to indicate
the date of acquisition of the property, and by entering the amount
in the field for "Opening balance of the undepreciated capital
cost". To do so, enter the original acquisition cost, plus the
capital additions made over the years, minus the total depreciation
you have taken, if applicable.
7. For "Did you dispose of an asset in this
class?" -Select Yes
Enter the amount for "Proceeds of disposition of an
asset", meaning the proceeds from the sale of the building as
well as the "ACB of the disposition", that is, the original
value plus the capital additions minus the depreciation that you
have claimed over the years.
8. In the field for "Description and amount of expenses
associated with the disposition of assets", enter the expenses
incurred for the sale of the building.
9. In the field for "Calculate the capital gain and carry the
result on Schedule 3", choose "Calculate capital gain"
from the drop-down menu. If you have a capital gain, the amount
minus the expenses incurred for the sale of the building will be
entered by the program on federal Schedule 3 and on Quebec Schedule
G.
10. You must also enter the sub-heading "CCA" choose the
following Class of property "Land - non-depreciable
property" located at the bottom of the page.
11. You must enter all relevant information.
Do not forget to specify whether you have liquidated all the
assets of this category on the line provided for that purpose, in
both pages that you have completed for the property as well as for
the land.
However, federal Schedule 3, as well as Quebec Schedule G if
applicable, will be generated to indicate the capital gain (or
loss).
For more information regarding rental income, please consult the
following CRA link:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/rental-income-line-126-net-line-160-gross.html
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036.html
ID: 20200831104152NA.xml
Webpage: KPA320-20200831104152NA.htm
