You report the severance to the CRA by adjusting the original combined property and splitting it between the two new severed properties. When you sell the first half, you will report the sale on Schedule 3, Capital Gains or Losses, using the adjusted capital cost to calculate the capital gain for that specific property. You will repeat this process for the sale of the second half in the following year.
For detailed guidance and forms, you can refer to the CRA's information on Adjusted Cost Base (ACB) and Capital Gains or contact the CRA directly at 1-800-959-8281.
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