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 of
the Interview tab", select the "CRA Questions"
section.
2. On the page
that appears, go to line " Did you sell a principal
residence in 2021 ".
3. If you
answer "Yes", the "Capital gains (or losses) and
ABIL" section will be generated in the "Interview
setup".
4. Then on
the "Interview setup", on the screen to the right, go
to the "Rental income" group, check the box for "Rental
property income", and click "Next" at the bottom of this
page.
5. On the
"Interview setup", click on "Rental property income",
and on the new page that appears to the right, select "T776 -
Rental income property".
6. 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.
7. On the
"Rental property income and expenses" page that appears on
your right. Remember to check the box indicating that this
is the final year of operation. Subsequently, enter the income
and expenses.
8. On the
"Left-side menu of 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.
9. 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.
10. 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.
11. 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.
12. Under the sub-heading
"CCA" also select the following Class of property "Land -
non-depreciable property" located at the bottom of the
page.
13. 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 links:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/completing-schedule-3/real-estate-depreciable-property-other-properties/example-disposing-a-principal-residence-partly-used-earning-income.html
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-12599-gross-line-12600-net.html
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036.html
ID: 20220221111642DEX.xml
Webpage: KPA320-20220221111642DE.htm
