If a Participant sells his or her residential home, which includes a renewable energy property, are there any income tax consequences?
Yes. Where a Participant sells his or her residential home, which includes a renewable energy property, a reasonable portion of the sale price must be allocated as proceeds of disposition of the renewable energy property and reported in Area A on page 4 of your Form T2125. This may result in a recapture into income of any CCA claimed on the property and such recaptured income must be reported for income tax purposes. For further information on reporting dispositions of depreciable property, please refer to Chapter 4 of Guide T4002, Business and Professional Income. The balance of the sale price is generally allocated to the residential home. If the residential home was designated as a principal residence for every year that it was owned, there will be no income tax consequences on the disposition of the residential home. For further information on “principal residence”, see Chapter 6 of Guide T4037, Capital Gains.
Related Questions
- What are the tax consequences when a taxpayer who previously claimed a casualty loss sells his property to an unrelated party and assigns the LRA Road Home grant to the purchaser?
- Can a Participant deduct any costs associated with the purchase and installation of the renewable energy property?
- What is the consequences if an MLS determines a Participant is not actively listing or selling property?
