deemed disposition for former principal residence

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
SergeP
Posts: 57
Joined: Mon Mar 09, 2009 10:38 pm
Location: hawaii

deemed disposition for former principal residence

Post by SergeP »

I am moving to US from Canada. I have a house where I have lived for the last 10 years. I do not plan to sell the house in the near future. I will use it for my returns to Canada during summer (or may rent it in the future). My new principal residence will be in US. This means I am converting my principal residence in Canada into my second home. For all future transactions with this house what should I use as a cost base for the deemed disposition? Will estimation from a real estate agent work for this purpose?
Serge
nelsona
Posts: 17806
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: deemed disposition for former principal residence

Post by nelsona »

There isn't any deemed diposition on CDn real esate when you leave, but you will want a solid Fair-market evaluation, for use both in the future cpa gains calculation for CRA when you sell, and for use on your US tax, should you convert to a rental.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
nelsona
Posts: 17806
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: deemed disposition for former principal residence

Post by nelsona »

A couple of agents' evals should work.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
SergeP
Posts: 57
Joined: Mon Mar 09, 2009 10:38 pm
Location: hawaii

Re: deemed disposition for former principal residence

Post by SergeP »

Thank you.
Serge
SergeP
Posts: 57
Joined: Mon Mar 09, 2009 10:38 pm
Location: hawaii

Re: deemed disposition for former principal residence

Post by SergeP »

I will move to US this year. I leave my current principal residence vacant until the next year. If I sell it in 2023, I will need to calculated a capital gain between the time I leave Canada and the time I sell the house. Should I file form T2091 for my 2022 filing to CRA to designate this home as my principal residence for the years before my move to US?
Serge
nelsona
Posts: 17806
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: deemed disposition for former principal residence

Post by nelsona »

You will get a "free" year when you do the cap gains calculation if you use the OVERALL gain, rather than the actual gain from departure, so you will likely avoid any Cdn tax (and US tax) if you sell within 12 months of leaving.

You only make the designation when you sell.
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
Post Reply