Subsection 45(1) - Property with more than one use
Paragraph 45(1)(a)
Cases
C.A.E. Inc. v. Canada, 2013 DTC 5084 [at 5944], 2013 FCA 92
The taxpayer, which leased flight simulators which it had manufactured, subsequently sold those simulators. The Minister denied capital cost...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property | 371 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(a) | change in use on depreciable property conversion to inventory | 124 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Machinery and Equipment | 371 | |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(b) | 370 |
Duthie Estate v. The Queen, 95 DTC 5376 (FCTD)
A change of use for purposes of s. 45(1)(a) from personal-use capital property to real estate inventory occurred in June 1981 at the time the...
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|---|---|---|
| Tax Topics - General Concepts - Estoppel | 85 | |
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(1) | contradictory assessments may be necessary | 93 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs | 49 |
Derlago v. The Queen, 88 DTC 6290, [1988] 2 CTC 21, 88 DTC 6290 (FCTD)
A taxpayer who purchased residential real estate in 1966 with the intention of renting it out until retirement and thereafter using it for his...
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| Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions | disposition implied proceeds receipt | 98 |
See Also
Sidhu v. The Queen, 2004 DTC 2540, 2004 TCC 174
The taxpayer, who had used a property as a rental property for nine years and then allegedly used the property as a temporary residence before...
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| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) | didn't inform return preparer of gain | 56 |
| Tax Topics - Income Tax Act - Section 54 - Principal Residence | 100 |
Hewlett Packard (Canada) Ltd. v. The Queen, 2003 DTC 1324 (TCC), rev'd 2004 DTC 6498, 2004 FCA 240
In October every year the taxpayer acquired a new fleet of automobiles for use by its employees and transferred possession of the previous year's...
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| Tax Topics - General Concepts - Evidence | 99 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Proceeds of Disposition | 263 |
Willis v. The Queen, 2003 DTC 1081, 2003 TCC 575 (Informal Procedure)
The taxpayer had acquired seven lots adjacent to their principal residence as a protective greenbelt. Due to a change in their personal...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | 147 |
Roos v. The Queen, 94 DTC 1094 (TCC)
Land which the taxpayers acquired as capital property for use as a tree nursery was converted into inventory when they made formal applications to...
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| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | conversion to inventory when fully committed | 71 |
Jones v. MNR, 90 DTC 1849 (TCC)
Five acres of land which the taxpayer was using for his personal residence were found to have been converted to inventory at the time that he and...
Administrative Policy
25 September 2015 External T.I. 2015-0596921E5 - Conversion from inventory to capital
Do the rules in s. 45(1) apply where a home builder, who initially held a property as inventory, commenced to use it for his personal use, having...
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| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | no s. 9 income when house converted to personal use is sold | 130 |
26 November 2013 Annual CTF Roundtable, 2013-0493811C6 - Change in use
Respecting the statements in C.A.E. that the change of use rules apply to the conversion of inventory to depreciable property or vice versa, CRA...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(a) | CAE not followed | 123 |
21 February 1994 External T.I. 5-933576
Because the application of s. 45(1) is limited to capital property for purposes of the determination of capital gains and losses in accordance...
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| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | 34 |
8 July 1992 External T.I. 5-920633
Where a corporation has acquired vacant land as capital property and not for an income-producing purpose and changes the use of the land by...
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| Tax Topics - Income Tax Act - Section 45 - Subsection 45(2) | 33 |
1992 A.P.F.F. Annual Conference, Q. 18 (January - February 1993 Access Letter, p. 57)
A taxpayer who acquires vacant land for one use and, at a later date, starts to use it to generate income, will have s. 45(1)(a)(i) apply at the...
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| Tax Topics - Income Tax Act - Section 45 - Subsection 45(2) | 25 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | 31 |
19 June 1990 T.I. (November 1990 Access Letter, p. 12, ¶1526)
Where an individual, who had been a full-time farmer, decided to give up farming to work in a different occupation, but retained the farmland and...
IT-102R2 "Conversion of property, other than real property, from or to inventory" 22 July 1985
8. Where capital property is converted to inventory, the action of conversion does not constitute a disposition within the meaning of paragraphs...
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| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | 106 |
IT-218R "Profit, Capital Gains and Losses from the Sale of Real Estate, including Farmland and Inherited Land and Conversion of Real Estate from Capital Property to Inventory and Vice Versa" 16 September 19864
10....where real estate is converted from capital property to inventory...for real estate that is used for the purpose of gaining or producing...
Articles
Harris, "Tax Aspects of Condominium Conversions and Lease Inducement Payments to Recipients", 1986 Conference Report, c.45.
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 0 | |
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | 0 |
Paragraph 45(1)(c)
Administrative Policy
S4-F2-C2 - Business Use of Home Expenses
Exception re ancillary use
2.43 ... [I]t is the CRA’s practice not to apply the partial change in use rules and resulting capital gains tax...
7 October 2016 APFF Roundtable Q. 2, 2016-0652841C6 F - Changement partiel d’usage - immeuble locatif et résidentiel
For the purposes of the s. 45 change-of-use rules, a child’s occupation of a dwelling is considered as personal use if a below-market rent is...
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| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(b) | on sale of triplex, individual can claim exemption only for years in which particular units were used personally or by children | 409 |
| Tax Topics - Income Tax Act - Section 54 - Principal Residence | triplex contained separate housing units | 151 |
Subsection 45(2) - Election where change of use
See Also
Bullard Estate v. The Queen, 2004 DTC 2717, 2004 TCC 249
Campbell J. found that because the deceased taxpayer did not make a s. 45(2) election in a return for 1990, she was prevented from doing so at a...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(19) | 88 |
Administrative Policy
11 October 2013 APFF Roundtable, 2013-0495621C6 F - Changement usage - Duplex
Is a duplex or triplex a single property (subject to the land-building allocation) for purposes of ss. 45(2) and (3)? CRA responded...
22 August 2014 External T.I. 2014-0541171E5 - Late 45(2) Election filed by executer
Mr. A rented out his home during his final years in a nursing home. Would CRA accept from his executor a late-filed s. 45(2) election for the home...
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| Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2) | late s. 45(2) election filed by executor | 94 |
25 September 2013 External T.I. 2013-0485751E5 F - Rescinding 45(2) election by a non-resident
If a non-resident holding Canadian real estate rescinds, in a subsequent taxation year, a s. 45(2) election that was made with respect to the...
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| Tax Topics - Income Tax Act - Section 116 - Subsection 116(3) | 154 |
13 February 2013 Internal T.I. 2012-0448391I7 - Validity of late-filed election and designation
The taxpayer, who sold a duplex to a non-arm's length person, filed his tax return on time without disclosing the disposition, then approximately...
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| Tax Topics - Income Tax Act - Section 54 - Principal Residence | 60 |
8 July 1992 External T.I. 5-920633
A taxpayer will be allowed to elect under s. 45(2) in relation to a capital property even where it is not a depreciable property subject to the...
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| Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) | 50 |
1992 A.P.F.F. Annual Conference, Q. 18 (January - February 1993 Access Letter, p. 57)
An election may be made under s. 45(2) in respect of capital property which does not constitute depreciable property to which s. 13(7)(b)...
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| Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) | 35 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | 31 |
Subsection 45(3) - Election concerning principal residence
Administrative Policy
7 October 2016 APFF Financial Strategies and Financial Instruments Roundtable Q. 4, 2016-0651791C6 F - Choix 45(2) et (3) - immeuble à logements
What should an individual do who, a number of years ago, changed the use of a duplex within the potential scope of s. 45(3) election, and is now...
13 November 2014 External T.I. 2014-0535611E5 F - Changement d'usage suivi d'un roulement
After an individual made the s. 45(3) election, the principal residence was transferred on a rollover basis under s. 73(1) to the individual's...
25 February 2013 Internal T.I. 2012-0440371I7 F - Changement d'usage - Duplex
The Directorate confirmed the position it took in 2011-0417471E5, which it summarized as follows (TaxInterpretations translation):
...a partial...
29 November 2012 External T.I. 2012-0433451E5 - Change in Use - Election under 45(3)
In 2007 the taxpayer and his spouse leave their principal residence for new employment and rent out the residence until 2011 without making the s....