Question

I sold my rental property in 2021, I lived in the property from 2008-2012, then started renting it out. How do i claim a terminal loss on this property ?

Forum|Forum|4 years ago
January 3, 2022
1 reply
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pls let me know the steps, i have real estate values from 2012 as i tried to sell the house. So i could use those for the fair market value

A

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You can only claim a Terminal Loss on your property if you have been taking Capital Cost Allowance (CCA) on it and you have a positive Undepreciated Capital Cost (UCC) balance after selling/disposing of the building.

Since residential properties generally grow in value rather than depreciate, selling a rented house usually doesn’t result in a Terminal Loss. Instead, you may have a Recapture of CCA, which means that your leftover UCC is added to your income, and becomes taxable. This TurboTax Tip has more information on CCA: Dos and Don’ts: CCA for Rental Property Explained

Before taking CCA on your rental property, it’s strongly recommended that you talk to a tax professional to discuss if it would be beneficial or not.