cecilia8chen Posted April 2, 2021 Report Share Posted April 2, 2021 In 2020, I sold an investment rental condo and so I claimed the capital gain on the disposition in my 2020 income tax return. This increased my 2020 income significantly (which usually consists of regular employment income and a small amount of rental income) and thus, my taxes payable. I will be paying the balance due by April 30, 2021 (for 2020 taxes). Now the UFile software is notifying me that I will be required to make installment payments for 2021 taxes! The sale of rental property is a one-off event and does not occur yearly. How should I approach this? What do I need to do to get CRA to give me an exception? Link to comment Share on other sites More sharing options...
AltaRed Posted April 3, 2021 Report Share Posted April 3, 2021 UFile doesn't know this is a 'one off' event so it is making the assumption that if you have more than $3k in Balance Owing in tax for 2020, your income for 2021 will be similar, and that CRA will similarly believe the same and require you to make installment payments. UFile is advising that as a public service but it is not the official word on that. You will need to wait until about August of this year to see if CRA actually sends you a notice to 'make installment payments' and if so, it will have calculated the numbers for you to pay on Sept 15th and Dec 15th. That all said, there are 3 options you can take at that time for installment payments: 1) accept the CRA numbers and pay and then recover same as Refund owing April 2022, 2) prior year option, and 3) current year option. All as explained here https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments/you-calculate-your-instalment-payments.html You can decide at that time which option to choose. Link to comment Share on other sites More sharing options...
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