Profile is not catching the capital loss on a rental property, but has captured the capital gains on two other properties that were sold in 2011

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Rooster,

Here is the answer to your specific situation:

When you dispose of a depreciable property, you reduce your CCA pool by the lesser of cost or proceeds.  If proceeds is greater than ACB, then the excess is a capital gain.

In the sample file, there were three building dispositions.  If you go to T776 AssetList#1, there is a column showing the “Lesser of cost and proceeds”.  If you add up all three dispositions, the lesser of cost or proceeds is $859,808.50.  If you go to T776CCA (CCA Item #1), you will see that the pool was reduced by that amount.  As proceeds were equal to UCC, there is no recapture or potential terminal loss.  The two buildings where proceeds is greater than ACB are properly showing up on S3.  You can never create a capital loss from a depreciable property disposition.

Here is how the proceeds were recorded:

Reduction in UCC: $859,808.50
Capital gain: $83,203.57
Total: $943,012.07 (859,808.50 + 83,203.57)

This is equal to the total proceeds received of $943,012.07 on the three building dispositions ($2669,155.54 + 292,856.53 + $381,000), so everything is in balance.  Profile is handling the situation appropriately.

Hope the above has answered your question.

Hardev
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