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CCA recapture

CCA rental capital gains

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#1 alorraway

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Posted 15 February 2016 - 04:26 PM

Been struggling a while on how to fill out Ufile for a sold rental property.  I know i will need to show CCA recapture into the income but not sure how to enter the details into Ufile.

 

In the CCA section, I have a Class 1 building ACB of $21K, UCC of $19K and Class 8 furniture ACB of $11K and UCC of $6K.  

 

I'm not sure what to enter in the field 'Proceeds of Disposition of an asset'.  If i look at the actual T776, it seems to show that the proceeds should not exceed the capital cost.  So i would just enter the ACB amounts?

 

I sold the entire property for $440K, purchased for $380K.  I have expenses on purchase and sale of course, but i have entered these in another section so i don't think i need to enter them in the CCA section as well.  

 

thanks.



#2 Bretonix

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Posted 15 February 2016 - 09:08 PM

Could you clarify the data about your property?

 

In the first paragraph you mention a building ACB $21K.

In the third paragraph you mention a property ACB $380K and no UCC.

 

Note that the expenses on purchase and sale are entered in the CCA section only

 - expenses on purchase are to be added to the ACB.

 - expenses on sale (disposition) are entered separately



#3 alorraway

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Posted 17 February 2016 - 04:47 PM

The entire townhouse was purchased for $380K.   I sold it recently for $440K.

 

For tax purposes, I only used $21K for CCA under class 1 and $11K for CCA for class 8 assets.  These amounts I considered to be the ACB as well.  The UCC is reduced after 3 years or so of CCA calculations...

 

I have expenses on both purchase and sale which is why I thought I would adjust these at the property level. 

 

I guess I'm very confused here and I should probably head to a tax accountant but thought I'd try and work it out first.   



#4 Bretonix

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Posted 28 February 2016 - 07:54 PM

I am discussing the townhouse, Class 1, only.

The same logic would apply to the Class 8 assets.

 

The ACB of the townhouse is $380,000.00 plus expenses incurred on purchase.

As you used $21K for CCA in previous years, your opening CCA is $359,000.00 (380K less 21K).

Your proceeds of disposition are $440,000.00.

 

You need to define a rental income property for the townhouse.

 - Beginning date - 01-01-2015

 - End date - date of sale

 

In the Income page, tick "this is the final year of operations"

Enter rental income and expenses from January 1st up to the date of sale.

 

Define a CCA Class 1 page for the townhouse,

 - description

 - purchase date

 - Opening balance of the UCC - ACB less 21,000.00

 - ACB of the depreciable property - 380,000 plus purchase expenses

 - Proceeds - 440,000.00

 - expenses associated with the disposition - sale expenses

 - ACB of the disposition - same as ACB of the depreciable property

 - Calculate the capital gain - select Calculate capital gain

 - Did you liquidate all assets ... "Yes"

 

The CCA recapture of $21,000.00 will show in the T776 form on line 9947.

The capital gain will show in Schedule 3, section 4. Real estate ...



#5 wskwong2000

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Posted 20 March 2017 - 02:33 PM

I believe the above procedure works if you also claim CCA in the last year of your business? What if during the year you sell your property, you didn't claim CCA? That's my case.


But I still have a recapture amount to enter in box 9947 of T776 form.  How can I enter it directly without filling out the CCA? (In fact, i tried entering CCA but it still doesn't calculate any values in the recapture amount for box 9947 for some reason).







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