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If I've claimed CCA in the last 2-3 years on my rental property but we have the intention of making it a principal residence, should we not claim CCA? If this is the case, would you just file a t1 adjustment to remove the CCA so we can claim future exemptions?
Hi Levi,
When you change the use of a rental property to a principal residence there will be a deemed disposition at that time. The deemed selling price is equal to the fair market value of the property on the date of the change in use. This can result in a capital gain and recapture of the Capital Cost Allowance previously claimed. Consider amending the previous years' tax returns to remove the CCA claimed and do not claim CCA going forward.