Reporting the Sale of Your Principal Residence: A New CRA Requirement
Effective with the 2016 tax year, ALL Principal Residence Dispositions must be reported on your personal Income Tax Return (T1) whether exempt or not. These new rules will apply to anyone that disposes of their principal residence; the disposition will be reported on Schedule 3 (Capital Gains) and eligible taxpayers will still be able to claim the exemption. In similar fashion to other Capital Gains type transactions, the proposed legislation indicates that you will have to report the following information on your tax return: • Date of Acquisition • Cost Base • Proceeds of Disposition • Description of the Property.
If you fail to report the disposition of a Principal Residence you could be subject to a fine of up to $8,000 (this is a retroactive charge) , CRA has decided that they will now be given the authority to assess taxpayers beyond the current limit of 3 years to ensure that proper reporting did in fact take place. As you can imagine, this is going to quickly become a very confusing and complicated area of Tax Legislation; As always, entrust the preparation of your Personal Tax Return to an Accounting Professional, do not leave it up to just anyone. The interest and penalties due to improper reporting could cost you thousands of dollars!
Questions? Email aritchie@ledgers.com
No comments:
Post a Comment