Change primary residence to Rental
Hi all, I've seen some solid advice on here regarding Rental/Investment properties, so was hoping to get some help with my scenario below. This would be in Ontario.
Bought Property 1 in 2016 as primary residence
Bought Property 2 in 2018 as new primary residence.
Started Renting out Property 1 in 2018
1) I understand when you switch status of property from PR to Investment/rental, it triggers a capital gain, as it's considered you sold and re-acquired. I read some articles that mention there's an option to defer the capital gains for 4 years - anyone know how elect this option and how to indicate it on tax return?
2) If I can defer (option 1) what is the UCC of Property 1 when filling in the tax forms? Is it the new Appraised value at time of transition or the original purchase price?
3) If I can't defer, I assume I have to indicate the capital gains from purchase date to Rental transition date. Then show the "new" property valued at the Appraised value. Is this correct?
Any advice is appreciated.
Bought Property 1 in 2016 as primary residence
Bought Property 2 in 2018 as new primary residence.
Started Renting out Property 1 in 2018
1) I understand when you switch status of property from PR to Investment/rental, it triggers a capital gain, as it's considered you sold and re-acquired. I read some articles that mention there's an option to defer the capital gains for 4 years - anyone know how elect this option and how to indicate it on tax return?
2) If I can defer (option 1) what is the UCC of Property 1 when filling in the tax forms? Is it the new Appraised value at time of transition or the original purchase price?
3) If I can't defer, I assume I have to indicate the capital gains from purchase date to Rental transition date. Then show the "new" property valued at the Appraised value. Is this correct?
Any advice is appreciated.