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Hi all,

In 2019, my wife and I inherited a home in the USA through a Trust when my uncle passed away. We sold it 4 months after. The state valued the property at the time of inheritance at 850,000. We sold it for 840,000. How do we enter this in TurboTax? T1135 form number 6?
 

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Assuming all outstanding taxes were settled by the uncle's estate and you inherited at value 850K free and clear, then you will fill out your T1135 to say that you owned the property and sold it at a loss. You will also report the loss in schedule 3.


It would be wise to have good supporting documentation about the 850K value. Presumably the estate documentation will support that if the CRA comes sniffing around for details.
 

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I don't think you have to fill out T1135 for specified foreign property.
Specified foreign property does not include:

  • a personal-use property as defined in section 54

I think you would classify this as a "personal use property' which you or a relative used for personal use only to live in ( not rented.) like a home or vacation home. You are not allowed to claim a capital loss for personal use property.

However, if you have a capital loss, you usually cannot deduct that loss when you calculate your income for the year. In addition, you cannot use the loss to decrease capital gains on other personal-use property. This is because if a property depreciates through personal use, the resulting loss on its disposition is a personal expense.

You do have to report the sale though on Schedule 3 (Capital Gains and Losses) under the 'Personal use Property' section 7. Personal-use property - Canada.ca

You need to get the exchange rate at the times of acquisition and sale and convert to $ CAN for the calculations. CPABC - Capital gains 101: How to calculate transactions in foreign currency

I am familiar w this because I will be recording the sale of a foreign home lived in by a relative as well in my 2020 return.
 

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I think you would classify this as a "personal use property' which you or a relative used for personal use only to live in ( not rented.) like a home or vacation home.
Maybe. But it was never personal use property to the OP. They only inherited after the death of the presumed resident. I think talking to a tax accountant might be a good idea. Or asking the CRA how they want to handle it.

Treating it as a personal use property is wise for at least one reason: the OPs filing deadline on the 2019 T1135 is passed and the penalty for late filing is $25 per day.
 
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