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russkajg
New Member

Turned my principal residence into rental in 2017, and am making 45(2) election. Do I still report deemed disposition? What sections in TurboTax do I need to fill out?

 
6 Replies
TurbotaxRobert
Level 2

Turned my principal residence into rental in 2017, and am making 45(2) election. Do I still report deemed disposition? What sections in TurboTax do I need to fill out?

If you have decided to file a S.45(2) election with respect to a change of use of your property from personal use to income producing use, you should file a paper return with CRA (instead of Netfiling) attaching to the return the details of the S.45(2) election that you are making (address of the property, date of the change of use, etc. and signing and dating this attached S.45(2) document - keep a copy for your records).

Here is a document that summarizes what is involved with the election.

http://www.mnp.ca/en/posts/changing-your-principal-residence-into-a-rental-property

Note the section that states that the "election must be filed in the return for the taxation year in which the change occurred. Canada Revenue Agency will accept a late-filed election if CC​A has not been claimed, but penalties may apply".

yoak
New Member

Turned my principal residence into rental in 2017, and am making 45(2) election. Do I still report deemed disposition? What sections in TurboTax do I need to fill out?

Thank you for the info.

 

is there a particular format for the letter? what is the header, I address it to who? 

 

Do I simply write: I wish to make an election under subsection 45(2) of the Income Tax Act. for my property at address XX. This changed happened on 01 Jan 2019.

 

Thank you for advise

 

TurboTaxNicola
Moderator

Turned my principal residence into rental in 2017, and am making 45(2) election. Do I still report deemed disposition? What sections in TurboTax do I need to fill out?

The starting you provided is a good start, I have provided the link below from the CRA website for additional information you may want to include if it applies to your situation:

 

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...

brandonrwsmith
Returning Member

Turned my principal residence into rental in 2017, and am making 45(2) election. Do I still report deemed disposition? What sections in TurboTax do I need to fill out?

if you have done all this, what amounts should I be using when filing? same years as OP, but i sent the letter for 45.2 mid 2019 after learning of it, and has been added to my file.

IE - do i deem the residence as principal the entire time if the 45.2 was put on my file? Or do I use FMV at time of change in use?

I believe the purpose of the 45.2 is to deem it as principal throughout, so that is my assumption. 

The only other documents I have been told to fill out are Pg2 of Schedule 3 and T2091. But those are more for my records as my understanding is that Netfile would take care of this.

Any suggestions here would be very helpful. Thank you

bhattmiral
New Member

Turned my principal residence into rental in 2017, and am making 45(2) election. Do I still report deemed disposition? What sections in TurboTax do I need to fill out?

Hi one question on this, Do I have to do election 45 (2) every year? or just once?

TurboTaxHeba
Moderator

Turned my principal residence into rental in 2017, and am making 45(2) election. Do I still report deemed disposition? What sections in TurboTax do I need to fill out?

You apply once for 45(2) election to change the use f your property from personal to rental.

 

I hope this was helpful

v