PeterKC

Hi Antoine7:

I owned a condo unit originally used for rental.   In 2020, I moved in the unit and designated it as my principal residence.    As this was deemed to have change the use of the unit, it was treated as a sale of the property, with an accrued capital gain based on the difference between the appraised market value in 2020 and the original purchased price 10 years ago.   

To defer tax on the capital gain, in conjunction with the filing of my tax return 2020, I informed CRA by mail last year that I elected under Subsection 45(3) of the Income Tax Act to defer tax payment of the capital gain accrued due to the deemed property disposition, until the property is actually sold.

The property was sold at the end of 2021 and I have moved to and rented a different place.   For my 2021 Tax Return, I therefore have the task of reporting the sale of the property twice:  first for the deemed change of use (with capital gain) and second, for the sale as a principal residence.  

In completing the 2021 Tax Return using Ufile,  I was able to fill the required information.   For the sale of the deemed change of use,  I put down July 2020 (the date I moved in) as the deemed disposition date.  As the date is not in 2021, I got a warning message from Ufile "The date value for this field is before the required minimum. The date should be '01-01-2021' or after, you have entered '30-07-2020'. Click here to review your data."

I am hesitate to arbitrarily change date as suggested, because 1) it is not the true date of my moving into the unit; and 2) it would indicate that I had occupied the unit for less than a year and therefore may run into the "exemption on capital gain" issue with its sale as a "principal residence".  

 I thought about adding an explanatory note in the file itself but I could not find a spot/a mechanism that would allow me to do so?   Can you advise/guide me how I might be able to do so.

Ufile was able to complete the processing of the tax return in spite of the warning.   I wonder if I should just ignore the warning and submit the return as completed without amending the date as suggested.   Any suggestions?

Kindly response by email or calling me at 250-619-7820.   Any assistance would be much appreciated.  

Regards

Peter

kcpeterho@gmail.com

250-619-7820

Hi Antoine,