New Condo Flipping Rules; unsure where/how to record a sale???

[pollyrs]

Hello.

I completed on a pre-construction condo in Nov 2022 with a partner.  We decide to sell it but it did not sell before the end of the year (2022).  We relisted in Feb 2023 but it was not selling so in the mean time, allowed 2 students (partners kids) to live in it for remainder of school semester.  No rental income (they simply paid utilities and fees) and we ended up selling in June 2023.  With the new rules in place, I am unsure where I would enter this "gain" from the sale in the program.  Is it no longer a capital gain and if not, where do I enter the details of the sale to include in Business income!?  Appreciate any assistance 🙂

[Geo123]

Hello pollyrs,

It appears your transactions cross 2022 and 2023, the Residential Property Flipping Rule is for 2023 and subsequent taxation years.  Please check with the CRA.

Residential Property Flipping Rule :

https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/residential-property-flipping-rule.html

[pollyrs]

35 minutes ago, Geo123 said:

Hello pollyrs,

It appears your transactions cross 2022 and 2023, the Residential Property Flipping Rule is for 2023 and subsequent taxation years.  Please check with the CRA.

Residential Property Flipping Rule :

https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/residential-property-flipping-rule.html

Ok that is sort of what I jd already thought. So where in Ufile do I enter this?  Will the program prompt me and guide me to the correct entries ?

 

thank you Geo

[Geo123]

 

Hello pollyrs,

Please see the example below.

For real estate (not primary residence) to record your capital gains or losses realized in the tax year, please follow these steps:

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

2. On the right-hand side of the screen, go to the "Investment income and expenses" group, check for "Capital gains or losses) and capital gain history" and click on "Next" at the bottom of the page.

3. Return to the "Left side menu on the Interview tab", select the topic "Capital gains (or losses) & ABIL".

Real estate, depreciable property, and other properties

Real estate, depreciable property, and other properties

Enter the details of the sale of the property. The program will calculate the capital gain or loss based on the amounts entered here.

*Type of capital property  [Building]

 *Description of the property  [MyCondo]

 *Province or territory of the property [Ontario]

 *Date of acquisition (dd-mm-yyyy) [01-06-2022]

 *Date of disposition (dd-mm-yyyy)  [01-06-2023]

 *Proceeds of disposition [$500,000.00]

 *Adjusted cost base of the property [$450,000.00]

 *Expenses incurred in making the disposition [$10,000.00]

*Designation of the property as a principal residence? [No]

>>T1 Schedule 3

 

Real estate, depreciable property and other properties  (see  principal residence and property flipping  on pages 2 and 3)

[19700]

x 50%

[13599]  500,000

[13800] 40,000

2023 taxable capital gains  [19900]  20,000

(or net capital loss)

 

>> 

 

 

[pollyrs]

5 hours ago, Geo123 said:

Hello pollyrs,

It appears your transactions cross 2022 and 2023, the Residential Property Flipping Rule is for 2023 and subsequent taxation years.  Please check with the CRA.

Residential Property Flipping Rule :

https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/residential-property-flipping-rule.html

Ok that is sort of what I jd already thought. So where in Ufile do I enter this?  Will the program prompt me and guide me to the correct entries ?

 

thank you Geo

[pollyrs]

This is amazing detail, thank you once again. It seems very similar to how I have done in the past (where/how to enter), I was just unsure if I needed to do anything different than I’ve done in the last. And it seems like Ufile maintains the same process and will take care of all the calculations once I’ve entered the details. Yay Ufile! 🤩

 

Thanks again , I appreciate the support, the detail, and all so quickly!  🙂🙏

[Geo123]

Hello pollyrs,

You are welcome and thank you.

[pollyrs]

Hello Geo123, me again.  I followed the advise you provided and completed all fields in UFile.  However, it does not seem to be creating anything on the T1 Schedule 3 and in fact, I am getting a warning when I click on the Review tab.  This is the warning message I get;

 

[pollyrs]

UPDATE:  I do now see it on the Schedule 3 but still get the Warning message ... is that simply that, a message?  It will not hinder my Netfiling when I am ready?

Always appreciate the assistance 🙂

Dana

[Geo123]

Hello pollyrs,

You are welcome.

Please contact UFile Support so we may review the file confidentially. Please include above note.  ATTN :  Geo
Please open a request ticket and submit an anonymous file for review on-line at https://www.ufile.ca/contact/contact-us

[edk92]

Was wondering if you could answer a question I have with regards to acquisition date that you have to enter when filing taxes. 
Would the aquisition date for a preconstruction condo we purchased be the date we signed the APS or the day of the final closing?? Thank you so much!!!

[Geo123]

Hello edk92,

Please Contact the CRA

1-800-959-8281 for inquiries related to individuals.

 Telephone numbers – Canada Revenue Agency / CRA wait times:

https://www.canada.ca/en/revenue-agency/corporate/contact-information/telephone-numbers.html

 

FYI - CRA link :

https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/residential-property-flipping-rule.html