You cannot claim payment of the principal portion of a loan as an expense under any circumstances. You may be able to claim an interest penalty (if applicable) as a moving expense. There are tax consequences related to the sale of a home with Class 43.1 or 43.2 assets. See CRA for guidance;
If a Participant sells his or her residential home, which includes a renewable energy property, are there any income tax consequences?
Yes. Where a Participant sells his or her residential home, which includes a renewable energy property, a reasonable portion of the sale price must be allocated as proceeds of disposition of the renewable energy property and reported in Area A on page 5 of your Form T2125, Statement of Business or Professional Activities. This may result in a recapture into income of any CCA claimed on the property and such recaptured income must be reported for income tax purposes. For more information on reporting dispositions of depreciable property, see Chapter 4 of Guide T4002, Business and Professional Income.
The balance of the sale price is generally allocated to the residential home. If the residential home was designated as a principal residence for every year that it was owned, there will be no income tax consequences on the disposition of the residential home. For more information on principal residence, see Chapter 6 of Guide T4037, Capital Gains.
Sign In
Canada (English)
EN
