Replacement property

In some cases, you can postpone or defer including a capital gain or recapture of capital cost allowance (CCA) in calculating income. Your rental property might be stolen, destroyed, or expropriated, and you replace it with a similar one. To defer reporting the gain or recapture of CCA, you (or a person related to you) must acquire the replacement property within the specified time limits and use the new property for the same or similar purpose.

For more information, see Income Tax Folio S3-F3-C1, Replacement Property.

You can also defer a capital gain or recapture of CCA when you transfer rental property to a corporation or a partnership.

Forms and publications

• Guide T4036, Rental Income
• Form T776, Statement of Real Estate Rentals
• Interpretation Bulletin IT-291, Transfer of Property to a Corporation Under Subsection 85(1)
• Interpretation Bulletin IT-378, Winding-up of a Partnership
• Interpretation Bulletin IT-413, Election by Members of a Partnership Under Subsection 97(2)
• Information Circular IC76-19, Transfer of Property to a Corporation Under Section 85

Related links

• Line 9947 – Recaptured capital cost allowance
• Ownership