I bought my principal residence in 2018 when I was a resident of Canada. In 2021, it was turned into a rental property (I did not and don't plan to claim CCA). I have also left Canada in 2021 and became a non-resident (am a US resident). I plan to move back into this property in the future once I move back to Canada permanently.
I have seen two methods to calculate capital gains:
Method 1) "plus 1" formula for exemption: (# of years home is principal residence + 1) x capital gain/ # of years home is owned;
Method 2) FMV has to be tracked every time change of use occurs. The difference between the two FMVs is the capital gain.
My questions are:
A. does being a non-resident make only method 1 available to me? If so, where I can find the guidance on CRA website that stipulates this?
B. if one stays a Canadian resident the entire time, which method do they use? Both are available?
Thanks!
How to calculate capital gains on Canadian Rental Property ("plus 1" formula or FMV method?)
Moderator: Mark T Serbinski CA CPA