Starting in the 2016 calendar year, the sale or disposition of any property a taxpayer owns must be reported on their personal income tax return. This must be reported regardless of whether the associated capital gain is partially or fully exempt from taxation (due to the principal residence exemption).
The Schedule 3 – Capital Gains (or Losses) and T22091 – Designation of a Property as a Principal Residence by an Individual (Other than a Personal Trust) now captures this information.
In prior years, the sale or disposition of your personal home that you designate as your principal residence for all the years you owned your home was not reported on your personal income tax return. In this situation, the principal residence exemption resulted in no tax impact to the taxpayer. However, the new rules announced on October 3, 2016 require the reporting of all property sales even when there is no tax impact to the taxpayer.
The CRA now requires the following information on all property sales:
The number of years the property is designated as principal residence;
The full address of the property;
Ownership percentage (ownership interest);
The date of acquisition;
The date of disposition;
The proceeds of disposition;
Outlays and expenses related to the disposition; and
The Adjusted Cost Base.
It is advisable to seek professional advice to understand the tax laws that impact your particular situation, and to guide you through the complexities of Canadian Income taxes.
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