Sold Commercial real estate

[jenn123456]

I sold a commercial property, the difference between purchase and sale prices is relatively small. I am not sure where or how to record the revenue on form T2125 and what would be considered a cost to selling the property versus a business expense allocated to the final year in business. 

some examples would be paying off the outstanding mortgage principle and repaying the original investment loan & interest. Or basic maintenance required to sell - a boiler repair.

Thanks

[Geo123]

Hello

SELLING YOUR PROPERTY (HOUSE OR RESIDENTIAL COMPLEX etc)
If you sell your house or residential complex, you generally have to report a capital gain or loss on the sale.
In general, half (50%) of a capital gain on the sale of your house is taxable. However, a capital loss is not deductible.  
For more information, see guide IN-120-V, Capital Gains and Losses.
>>IF select building THEN NO CAPITAL LOSS

Depreciable property

When you dispose of depreciable property, you may have a capital gain. In addition, certain rules on capital cost allowance (CCA) may require that you add a recapture of CCA to your income or allow you to claim a terminal loss.

Capital gain

Usually, you will have a capital gain on depreciable property if you sell it for more than its adjusted cost base plus the outlays and expenses incurred to sell the property.

Note

A loss from the sale of depreciable property is not considered to be a capital loss. However, you may be able to claim a terminal loss.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/completing-schedule-3/real-estate-depreciable-property-other-properties/depreciable-property.html

 

[jenn123456]

Great. Thank you. I found the correct form for the sale information. 
 

I am still struggling to find out what is and eligible disposition expense.  The two most challenging is paying off the outstanding mortgage principle and paying off the balance of the original investment loan and outstanding interest. Thank you

[TobyRooney]

Expenses like paying off the outstanding mortgage principle and repaying the original investment loan & interest could have tax implications, so it's essential to discuss these with a professional.As for basic maintenance required to sell, like the boiler repair, these could potentially be considered as part of the cost of selling the property. However, the specific treatment may vary based on tax laws in your jurisdiction and other factors.I strongly advise seeking advice from a tax expert, like Mortgage Broker in Chesterfield, to ensure you handle this correctly. They can help you maximize your deductions and minimize any tax liabilities.

[Geo123]

Hello,

Per the CRA :

Outlays and expenses

These are amounts that you incurred to sell a capital property. You can deduct outlays and expenses from your proceeds of disposition when calculating your capital gain or loss. You cannot reduce your other income by claiming a deduction for these outlays and expenses. These types of expenses include fixing-up expenses, finders' fees, commissions, brokers' fees, surveyors' fees, legal fees, transfer taxes, and advertising costs.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/definitions-capital-gains.html