Capital Loss on Sale of House?

martuzzi · Post by **martuzzi** » Wed Apr 20, 2016 1:36 pm

I'm a Canadian citizen who's been a resident of the USA for the past 3 years. I plan to move back to Canada during the summer. I own my principal residence in the USA and plan to put it up for sale soon. Hypothetically, if the contract were to close the day after I entered Canada, is there anything stopping my from reporting a capital loss to CRA on the sale of this house? My ACB would be my realtor's appraisal and my realized loss would be the actual selling price, minus closing costs, minus ACB.

Thanks in advance!

nelsona · Post by **nelsona** » Wed Apr 20, 2016 1:50 pm

You can never claim a loss on a non-income producing personal use real property. Your US property would be considered either a home or cottage, neither of which is leigible for a capital loss.

martuzzi · Post by **martuzzi** » Wed Apr 20, 2016 1:58 pm

Thanks Nelsona.

So then would you say the only way to make this work would be to convert my US house to a rental before selling it? If so, is there a minimum amount of time the house needs to be classified as a rental property?

nelsona · Post by **nelsona** » Wed Apr 20, 2016 2:11 pm

Yes, you could do this. The rental income would be taxable in both countries, and if you held on to the property long enough (3 years) you would lose its primary home status.

There is no real minimum time, but it would have to be rented out, ie. generating rental income, other wise it remains a cottage.

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