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Discussion Starter · #1 ·
Hi everyone

I have a question about selling rental property at a loss. I have a rental property I paid 172k in 2014. I talked with my realtor and she sent me the recent sold in my area, so I think it will sell for 160k if I am lucky.

So if I sell it for a loss, what kind of loss is it? Does it has to be a capital loss and only be claimed against my future capital gain? Or it could be a general loss and claimed against my salaried income? If I sell it at a loss this year, but have little income (because I am on mat leave), can I use this loss for future income?

Thank you!
 

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Have you been running it as a business? i.e. sole proprietorship, and claiming CCA against the rental income that you declared? Why do you want to sell it?
 

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Discussion Starter · #3 ·
I was living in a different condo in the same complex. It was bought initially for family members, then it was rented out. Never claimed CCA. But it was never my primary residence.

Recently, we bought a house. So I'd like to pay off the mortgage faster. Plus, with kids and job, I really don't have the time and energy to manage it.
 

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So from time of purchase, family members should be there principal residence. The change of use and claiming net rental as income on your personal return, now selling for the principal change from time of change of use.

Do you have a mortgage on it?
 

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So from time of purchase, family members should be there principal residence. The change of use and claiming net rental as income on your personal return, now selling for the principal change from time of change of use.

Do you have a mortgage on it?
From what I can tell, there is no change in use because she never occupied the place as a principle residence. It was always a rental property.

Did you acquire any land when you brought the property? Why weren't you claiming CCA on the condo?
 

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To answer your question, your capital loss will go against future capital gains, not against any earned/employment income.

A couple of options, assuming there was a rental income declared, you could go back previous years and refile your taxes, and claim CCA on residence. That would reduce your taxes from the previous years. However, CCA can only be taken to the point you still have rental income, you cannot take to put you in a negative rental income. To do this, you would have to refile an amendment for each year. If you did not declare income from your parents, then there is no need for taking off CCA.


I would consider just renting it out. If you haven't been getting rent for it from your parents, you could refinance the place with a new mortgage, use that money to pay off your current mortgage, and then write off the mortgage expense off the rental. If you have been declaring rental income in the past, then it's a little different, you would need to use your money to put it in another investment, and then you could take the proceeds to pay off your place. You would want to speak to your accountant for the latter strategy.
 

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There are no capital losses on depreciable property. There can be a terminal loss if the property is sold for less than its UCC.

CCA cannot create or increase a rental loss, but terminal losses can...especially so if the business ceases to carry on after the disposition. So, if you sell you should be able to deduct this against employment income or carry it forward as a non-capital loss.


Don't forget to factor in closing costs on the purchase and sale into the calculation of the initial ACB and the proceeds of disposition (if you decide to sell). In fact, you should probably calculate this for the purchase in 2014 if you still have the documents, regardless of whether or not you sell soon.
 

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Folks - let’s look at the facts. This is a personal use property and as such, you cannot deduct a loss. The condo was purchased for the private use of friends and family. The rules are simple - if have a gain, it must be reported; losses are non deductible. Forget about turning the condo into a rental property and then claiming a loss. When the property use is changed from personal to rental, the cost of the rental property is deemed to be fair market at the time of the change in use.
 

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Folks - let’s look at the facts. This is a personal use property and as such, you cannot deduct a loss. The condo was purchased for the private use of friends and family. The rules are simple - if have a gain, it must be reported; losses are non deductible. Forget about turning the condo into a rental property and then claiming a loss. When the property use is changed from personal to rental, the cost of the rental property is deemed to be fair market at the time of the change in use.
My apologies, My prior post is completely incorrect. I did not follow the thread completely and posted too quickly - a terminal loss is available for the decrease in value from when change in use occurred
 

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And why not continue to lease your property? I think it's much more profitable than making a loss on the sale. Especially now, when the market is in complete chaos, with prices jumping every day. It is impossible to guess when and how best to sell your house. And this would be an excellent long-term investment. Not only will the money drip off, but real estate is the best way to keep your money. In any case, you need advice from a good company that understands all land issues. My cousin recommended these guys to me Residential - Commercial Fixed Fee Conveyancing Solicitors - Suffolk. After working with them, I can also recommend them as experts in their field. Rest assured that they will help you dispose of your real estate correctly.
 
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