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iuaassoc

CNIL and Capital Gains reporting

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For the past 10 years or so I have been recording investment losses on a rental property.  The property sold last year and I need to claim both the capital gain (on the overall property - sale price less base price less expenses of sale) and the total accumulated CNIL.  I did not depreciate the property for tax purposes over the years.

 

I entered the sale and base amounts in the Capital Gains (or losses) section.  Question:  should those amounts be net of (plus/minus) the expenses incurred in the sale?

 

The CNIL calculation shows up in a T936 but I do not see where that is then carried anywhere (ie to a T657). 2015 was the last year of that business so I am expecting to be taxed on the CNIL.  What am I missing?

 

Thanks

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Hi iuaassoc,

 

To enter your cumulative net investment loss (CNIL) balance, please follow the steps below:

1- In the "Left side menu on the Interview tab", select the "Interview setup".

2- Then, on the page appearing on the right, go to the "Investment income and expenses" group, check the box "Interest, investment income and carrying charges/interest expenses/CNIL (T3, T5, T4PS, T5008, RC359)", and click "Next" at the bottom of the page.

3- Back in the "Left side menu on the Interview tab", select "Interest, investment income and carrying charges".

4- On the right-hand side screen, scroll down to "Other schedules" group and check the box "T936 - CNIL (cumulative net investment loss) balance".

5- Enter the relevant information.

This is the CNIL (cumulative net investment loss) data accumulated at the end of the previous tax year. CNIL data are required to calculate the deduction for eligible capital gain.

The program will use the opening balances with the different types of income and expenses that you have for the current year to calculate your closing balances.

The closing balances will be carried over to become the new opening balances for next year.

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I have entered all of that using the total CNIL that CRA has on file (ie the rental losses over the last 10 years).

 

Now that the property has been sold I presume that I will be required to pay the tax owing on those losses (since the property itself sold for more than I paid 10 years ago).

 

Am I missing something - I would have thought the CNIL would somehow be carried into a now taxable line item.

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