I purchased a house in 2016 with intent of renovating and selling for profit. I made substantial renos / additions and listed it for sale in Nov 2017. While it was still listed for sale, I accepted a short term rental from Jan 2018 to Jun 2018. The house is now sold with closing expected in Jun 2018. How do I report this?
Your renovations will be added to the original purchase price for the property. You will need to file a rental schedule with your 2018 income tax return to report the rent received and operating expenses incurred during the time of rental. The sale of the property will be reported as a Capital Gain in the year of sale.
Do I need to report in my 2017 return, capital expenses incurred for renovations done in 2017, or do I only file those capital expenses in the year of sale?
You your renovation costs in calculating the "First Year Details" for your investment property purchase. (See link for description). You should create the rental schedule in 2107, without income or current expenses and set up the ACB for Building and Land as CCA.
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