Principal residence change

[mansur18]

We have changed our principal residence in 2023. While filing my 2023 taxes I answered "Yes" when asked in the interview "Did you Dispose of a property in 2023, that was your principal residence",

1. But technically I sold the one I was living in for last 10 years and bought another principal residence. Will this still be considered, Dispose of the principal residence?

2. What should I report under "Adjusted Cost Base" & Proceeds of Disposition". Will this be the same amount in both fields which I received from the sale of the property minus legal fees and real estate commission? or will this be the offer price in the sale deed?

3. The property was jointly owned by me & my spouse, should I fill out the same detail under my spouse too or software will do the rest if I only fill this info under mine?

4. Why there is no question about another principal residence I bought?
5. how do I do the property taxes for Provincial return, for two dwellings I owned during the same year? there is no option in the software to insert two addresses.

[TurboTaxGinette]

What is a Principal Residence?

As the name implies, your Principal Residence (PR) is the main home where you and your family reside. Your PR could be a house, condo, mobile home, cottage, houseboat, etc. In the simplest terms, it’s the place where you live the majority of the time. If you sell your PR after 2017, you are required to report the sale on Schedule 3 of your tax return, as well as fill out Form T2091(IND).

The Principal Residence Exemption

In Canada, if you sell property for more than you paid for it, your profit is usually subject to capital gains tax. Your PR, however, is usually exempt from capital gains rules. If you’ve made a tidy profit from the sale of your PR, all you’ll need to do is report the sale details on your tax return. As long as your home was your principal residence for the entire time you owned it, your profit will not be taxed.

For example, imagine you purchased your home 10 years ago for $100,000. Last month, you sold it for $300,000.

If the property was wholly used as your PR for the entire 10 years (not used as a business or rental), the $200,000 profit you made is completely exempt from tax. You just need to report the details of the sale on your tax return.

But if your principal residence was used to earn income, different rules apply. When you sell, your profit may not be exempt from tax.

For more information, please see our TurboTax article: What Is the Principal Residence Exemption and How Does It Work?

Thank for choosing TurboTax.

[mansur18]

Thanks for the prompt reply. 

I get the answer for Q.1, my actual Questions were from Q2 to Q5

[TurboTaxSusan · Accepted solution]

What is adjusted cost base (ACB)?

Adjusted cost base (ACB) is usually the cost of a property plus any expenses to acquire it, such as commissions and legal fees. Adjustments can include items such as capital expenditures. Additional information can be found by visiting the CRA's section on adjusted cost base

The proceeds of disposition are usually the amount you received or will receive for your property. In most cases, it refers to the sale price of the property.

If you are using TurboTax Online you'll enter the principal residence info once for both spouse if you are preparing the returns together. If you are using TurboTax CD/Download, you'll need to enter the principal residence form on both returns.

You don't need to report anything about your new home until you sell it.

When you are claiming your property tax credit in the provincial section, click on the Additional Home button to be able to add info for your second home.

[mansur18]

Thank you so very much for the clarification. Much appreciated

[TurboTaxGinette]

You are welcome.

Thank you for choosing TurboTax.