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harleyforer
Returning Member

Do I claim a terminal loss vs capital loss on a depreciable rental property upon disposing of the asset?

 
1 Best answer

Accepted Solutions
ayseleren18
Level 4

Do I claim a terminal loss vs capital loss on a depreciable rental property upon disposing of the asset?

Thank you for choosing TurboTax,

 

Yes, you can claim terminal loss from your rental income. As per CRA,  you will have a terminal loss when you have no more property in the class at the end of a year, but you still have an amount you have not deducted as capital cost allowance (CCA).

In the year you dispose of your rental property, you can subtract this terminal loss from your rental income and, if the loss is more than your rental income, you can create a rental loss.

However,  as per CRA, you cannot have a capital loss when you sell depreciable property. As mentioned above,  you can have a terminal loss. For more information, go to Column 6 – Undepreciated capital cost (UCC) after additions and dispositions (column 2 plus column 3....

Please visit the website of CRA on Selling your rental property and see our TurboTax article on Dos and Don’ts: CCA for Rental Property Explained to learn more about selling rental properties.

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1 Reply
ayseleren18
Level 4

Do I claim a terminal loss vs capital loss on a depreciable rental property upon disposing of the asset?

Thank you for choosing TurboTax,

 

Yes, you can claim terminal loss from your rental income. As per CRA,  you will have a terminal loss when you have no more property in the class at the end of a year, but you still have an amount you have not deducted as capital cost allowance (CCA).

In the year you dispose of your rental property, you can subtract this terminal loss from your rental income and, if the loss is more than your rental income, you can create a rental loss.

However,  as per CRA, you cannot have a capital loss when you sell depreciable property. As mentioned above,  you can have a terminal loss. For more information, go to Column 6 – Undepreciated capital cost (UCC) after additions and dispositions (column 2 plus column 3....

Please visit the website of CRA on Selling your rental property and see our TurboTax article on Dos and Don’ts: CCA for Rental Property Explained to learn more about selling rental properties.

View solution in original post

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