Claim CCA on rental condo sold

[ken10142]

Hi. I sold my rental condo in 2022 but never claimed CCA during the rental period (not aware of it until now). Is it advised to claim CCA on the finish of rental year, in this case y2022? 

[Geo123]

Hello ken10142,

You can claim the CCA for prior year(s)if you REFile for the prior year(s.)

[ken10142]

@Geo123thanks. I also read there might be tax recapture if, upon sale, there is appreciation in property value. Does the recapture happen and be calculated the same time when I file the tax return (ie. show up in Review tab in UFile), or wait for CRA to contact me after I submit the return? 

[Geo123]

Hello ken10142,

CCA recapture will be calculated automatically by UFile if the data has been entered from prior year(s) : ACB / UCC / CCA.

FYI. 

Line 9947 – Recaptured capital cost allowance – add to Rental Income
proceeds (dispositions) > UCC
A recapture of capital cost allowance (CCA) can occur when the proceeds from the sale of depreciable rental property are more than the total of both: the undepreciated capital cost (UCC) of the class at the start of the year. the capital cost of any additions during the year.

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/rental-income/completing-form-t776-statement-real-estate-rentals/line-9947-recaptured-capital-cost-allowance.html

 

[ken10142]

@Geo123 Thank you so much! I determined not to go ahead with CCA claim. But then I run across a technical problem of UFile:

upon disposition of my condo which was rented for a period in y2022, when I filled from left-side menu both the "T776 - CCA - Land non depreciable property " and "Capital gains (losses) and ABIL - personal use property", it looks my capital gain was exaggerated (or calculated seperately in these 2 forms and then combined to show up in UFile tax return tab). As this condo was my principal residence for the beginning few years and then rented out until y2022, does it make sense that I only have to fill the "Capital gains (losses) and ABIL - personal use property"? I also noticed that in the "T776 - CCA - Land non depreciable property" form there is no place to designate period for principal residence, which might be the reason the ultimate capital gain number in tax return tab is such inflated. Is my understanding correct? 

Thanks for the long reading. Any response reg. this is highly appreciated. 

[Geo123]

Hello ken10142,

The condo has two CCA components - the building (depreciable) and the land (non-depreciable).

PRE – Principal Residence Exemption
1. On the "Left-side menu on the Interview tab", select the "CRA Questions" topic.
2. On the page that appears, go to the line "Did you sell a principal residence in 2022?".
3. If you answer "Yes", a topic will be generated in the "Left-side menu on the Interview tab" with the heading "Capital gains (or losses) & ABIL".
4. On the page appearing to your right, click on the plus sign "+" icon to the right of the line "Personal use property (Including the principal residence)".
5. On the page that appears, enters the relevant information in the first fields. If you are a co-owner of the residence with your spouse, go to the line "Your percentage share of capital gain/loss recorded here" enter your percentage.
6.The following line will be generated "Do you wish to transfer the remainder to your spouse's tax return (if applicable)?".
7. If you answer "Yes" you do not need to answer the CRA's question "Did you sell a principal residence" in your spouse's file because the program will transfer the information into their file.
8. Then go to the "Principal residence" section and go to the line that starts as follow: "Designation of the property as a principal residence to the Canada Revenue Agency (CRA)." and answer, "Yes" if the property that was sold was your principal residence as defined by the CRA and enter the address of the principal residence.
9. Next, go to the "Designation" section and select the period (taxation years) during which that property was designated as your principal residence. In the fields that follow, enter the year of beginning and the year of the end as the principal residence.
10. However, if you have not permanently resided in your principal residence, click the plus sign "+ Add another" icon to create another occupancy period for your residence.
11 If you rented your residence during the unoccupied period, go to the line "Change in use of property and election under section 284 or 286.1", and by selecting "Yes" a field will be created to indicate the period (from what year to what year) during which the residence was leased.