Hello,
In 2020, I sold a house that was my primary residence for a few years, and then a rental for a few years. I am filling out my taxes using HR Block. It says I need to fill out and then mail in forms T2091 (Designation of a Property as a Principal Residence by an Individual) and T2091 worksheet (Principal Residence Worksheet) to properly calculate my capital gains.
I am having trouble understanding how to fill out the forms. Most of the line items are about the property value before 1981, before 1995, and before some other dates that are way before my time of ownership. Do I need to track down the value of the property from those years even though I did not own the property? What sections do I actually need to fill out when the majority of the forms seem irrelevant to me?
I bought the house as a primary residence in 2014. I lived in it for 4 tax years up to 2018. For 2 tax years (2019-2020) it was a rental property. So I owned it for 6 tax years (4 as primary, 2 as rental).
I am having trouble understanding why calculating my capital gain on the house is so complicated. My understanding is that I have to pay capital gains tax on the value gained during the rental period (2019-2020) and not for when it was my primary residence. Is this not correct? Is it not as simple as Sale Price minus Value at start of rental period?
Any insight, help, or resources would be greatly appreciated.
Thanks!
