Quote:
Originally Posted by mustache ride
So under your interpretation, whether i depreciate my rental property or not, i would owe the difference in fair market value anytime i chance the status of my rental to primary?
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Close - 50% of the difference between whatever its value was when you bought it or turned it into a rental property, and its value when it ceases to be a rental property, is included in your income as a capital gain.
Meanwhile, if you take CCA (depreciation deduction), 100% of the depreciation will be included in your income as CCA recapture.
In other words, in your situation, CCA will be more of a tax deferral than tax savings. You save tax now but have to pay it when you sell the property or change its use from rental to primary residence.