How do I Report the Sale of my Principal Residence Turned Rental?
I purchased "Home A" in May 2009 and lived there until August 2017. I moved to "Home B" in August 2017 and kept "Home A" as a rental (one family rented it and I reported rental income on my tax return but did not claim any CCA).
I want to designate Home A as my principal residence from 2009 to 2017.
How do I calculate my gain for schedule 3 in this specific case?
In 2017 do I have a deemed disposition at FMV (since the use of the property changed), where this FMV becomes my new ACB? If so, if my FMV is my new cost, do I still get to add legal fees and land transfer taxes to the FMV to come up with my new ACB (as well as any capital costs incurred after 2017?
One of the tax software programs out there told me I have to fill out form T2091 (IND)-WS E "Principal Residence Worksheet" and form T2091 (IND) E (20) "Designation of a Property as a Principal Residence
by an Individual (Other than a Personal Trust)" and physically mail them into the local tax office... this seems so strange to me that this would need to be done for every sale relating to a principal residence designation... has anyone else done this? Is this necessary?
Thank you so much in advance for any input!
Reviewing your question, you are mostly correct in your statements.
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