Principle Residence T2091

[jephk]

Having trouble locating where I put down that the rental property was a principle residence...form t2091 doesn't exist. Is there somewhere on the capital gains form to make that designation?

 

Thanks

[Gabriel]

The program does not support the forms for designation of a property as a principal residence because they are required for information purposes only.

 

Therefore, you must download them from their respective government websites, print them, complete them, and file them by mail.

1- For form T2091 - Federal:

 

http://www.cra-arc.gc.ca/E/pbg/tf/t2091_ind/

 

Worksheet - Federal:

 

http://www.cra-arc.gc.ca/E/pbg/tf/t2091_ind_-ws/

 

2- For form TP-274 - Quebec:

 

http://www.revenuquebec.ca/en/sepf/formulaires/tp/tp-274.aspx

 

You must complete and file these forms with their respective governments by mail. The CRA and Revenu Québec will take these forms into account when determining the principal residence.

[a_lamonta]

The principal residence is for information purposes only for the federal gov. However in Quebec the taxpayer is required to include the capital gain and take the principal residence deduction on a separate line (by filing TP-274). In other words, for Quebec, you have to go through the exercise of +1 -1 =0. Confirmed this info with MRQ.

How do we do that in order to eliminate the risk of having unreported income for provincial purposes?

[Gabriel]

If you disposed of property that qualifies for the capital gains exemption during the taxation year, namely:
 

a) Qualified small business corporation shares.
b) Qualified farm property.
c) Qualified fishing property.
 

Please follow the steps below:
 

1- In the "QuikClik Navigator", located to the left-hand side of the screen, select "Interview setup".

2- In the "Income" section, check the box for "Capital gains (or losses)" and click "Next" at the bottom of the page.

3- Return to the "QuikClik Navigator" and choose the item "Capital gains and ABIL".

4- On the screen to your right, select the appropriate item, in this case "Qualified small business corporation shares (QSBCS)" and enter your information on capital gains on this page.
 

The program will carry over your capital gains deduction on line 254 of the federal return and, for Quebec residents, on line 292 of the Quebec return. In addition, the program will generate federal Form T657 and Quebec Form TP-726.7.
 

For more information on the capital gains deduction, please consult the following CRA links:
 

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns248-260/254/menu-eng.html

http://www.cra-arc.gc.ca/E/pub/tg/t4037/README.html

[a_lamonta]

I'm sorry but I'm not sure that applies to me. This is a principal residence. I called both the ARC and the MRQ on the subject, and while the ARC says that the gain on a principal residence does not need to be declared, the MRQ does want it declared. The MRQ is currently entertaining themselves by going after sellers of principal residences, making this important in Quebec. 

For provincial tax purposes, the Capital gain on the property must be included, and TP-274 must be filed to take the deduction and zero-out the gain. Is this possible with ufile?

[axation]

Not necessary to report a fully exempt sale of a principal residence on the tax return,

however taxpayer must still complete and file form TP-274 with the income tax return.

 

Form TP-274 does not appear to be supported in Ufile, but is available here:
http://www.revenuquebec.ca/en/sepf/formulaires/tp/tp-274/default.aspx

and should be ultimately mailed to Revenue Quebec.

[a_lamonta]

Not to be a pain, but while that is accurate for federal purposes, for Quebec purposes, they do require the gain to be declared, even when the principal residence deduction will eliminate the entire gain. I had spoken to them last week and they confirmed that fact. 

 

I spoke to them again today since it does not appear that UFile allows for the declaration and TP-274, and concluded with them that the easiest workaround was to file my taxes without the gain, and to file the TP-274 in paper format as an amendment. As long as the amendment is sent prior to April 30, there is no risk of undeclared income penalties. As for interest, the taxable amount is $0, so not-applicable anyways. I might be overly careful on this case, but I prefer to keep it clean, especially since my gain is 100% deductible.

[axation]

for Quebec purposes, they do require the gain to be declared

TP-274 states the following:
"There is no capital gain if your designation applies to all the years during which
you owned the property or to the year in which a real servitude encumbering
the property was established. In such a case, complete only Part 1 and Part 2
of the form."