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New Member
posted May 23, 2021 7:44:25 AM

We sold one of our rental property in 2020, where we lived for a bit during the years we owned it, does it qualify for primary residency?

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1 Replies
Level 6
Jun 8, 2021 10:23:16 AM

Thank you for choosing TurboTax. As of the tax year 2016, Canada Revenue Agency (CRA) requires that individuals report the sale of their principal residence to improve compliance and administration of the tax system.

 

If the property was your principal residence for all the years that you owned it, you don’t have to pay tax on your capital gains. The principal residence exemption rule has not changed from prior years. Only the requirement to report the sale is new.

 

When you’re completing your return, you’ll need to enter some information about the sale (such as the year you acquired the property and your proceeds of disposition).

 

For more information please check: CRA information on reporting the sale of your principal residence

 

How to report the sale of your home (principal residence)?

 

As of 2016, details about the sale of your principal residence must be reported on your tax return. This information should be entered in the Income section of TurboTax. Follow the relevant instructions below to add these details to your return.

 

Instructions for TurboTax Online-

If you’re preparing a single return:

  1. Select Find (or the magnifying glass icon).
  2. In the Find window, type principal.
  3. Select Principal Residences from the search results, then select Go.
  4. On the Sale of your Principal Residence step, select Sale of a principal residence under your name, then Continue.
  5. Enter information related to the sale in the appropriate fields, then select Continue.
  6. On the Disposition to a spouse or partner step, answer the question(s), then select Continue.
  7. On the Designation of a property as a Principal Residence step, fill out the fields, then select Continue.
  8. On the Sale of Principal Residence Summary step, select Continue.

If you and your spouse/partner are preparing your returns together:

  1. Select Find (or the magnifying glass icon).
  2. In the Find window, type principal.
  3. Select Principal Residences from the search results, then select Go.
  4. On the Sale of your Principal Residence step, select Sale of principal residence under the name of whoever owned or co-owned the property, then Continue.
  5. Answer the question on Who disposed of the property? step, then select Continue.
  6. On the Sale of your Principal Residence step, enter information related to the sale in the appropriate fields, then select Continue.
  7. If both you and your partner co-owned the property, skip this step and go to step 8. If only one of you owned the property, on the Disposition to a spouse or partner step that appears, answer the question(s), then select Continue.
  8. On the Designation of a property as a Principal Residence step, fill out the fields, then select Continue.
  9. If you and your partner co-owned the property for the same amount of time or if only one of you co-owned the property, skip this step and go to step 10. If you and your spouse/partner co-owned the property for different lengths of time, after the Designation of a property as a Principal Residence step reappears with questions for your partner, fill out the fields, then select Continue.
  10. On the Sale of Principal Residence Summary step, select Continue.

 

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Instructions for TurboTax CD/Download (Forms method)

 

If you need any further clarifications, we would be glad to assist you by having you contact us by phone or via Facebook or  Twitter.