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New Member
posted Nov 20, 2019 8:11:16 AM

I am wondering how the proceeds from the sale of a principal residence are calculated.

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1 Replies
Level 6
Nov 20, 2019 2:21:55 PM

Hi, thank you for using Intuit turbotax Live Community

The Canada Revenue Agency (CRA) definition of proceeds of disposition is " usually the amount you received or will receive for your property. In most cases, it refers to the sale price of the property. This could also include compensation you received for property that has been destroyed, expropriated, or stolen";

from CRA guide T4037. There are definitions for both proceeds and ACB ("cost") in the capital gains guide.

The actual taxable capital gain, if any, is calculated on form T2091. Using the actual proceeds, cost and years elected as principle residence, the T2091 will determine if there is a taxable capital gain

More information can be found at: 

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/principal-residence-other-real-estate.html

and in the capital gains guide I referenced above:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037/capital-gains-2016.html#P213_21226

Hope this helps