This form is a multiple copy form which also allows you to enter the percentage of the property held by each spouse.
The following instructions are taken from the form.
Use this form to designate a property as a principal residence. You must also complete the "Principal residence designation" section of Schedule 3 for the year the deceased person:
- disposed of, or was considered to have disposed of, his or her principal residence, or any part of it; or
- granted someone an option to buy his or her principal residence, or any part of it.
Note
If the deceased person was not a resident of Canada for the entire time he or she owned the designated property, call 1-800-959-8281.
The period of non-residence may reduce or eliminate the availability of the principal residence exemption.
For more information about designating a principal residence and what qualifies as a principal residence, see Income Tax Folio S1-F3-C2, Principal Residence, or the "Principal residence" chapter in Guide T4037, Capital Gains.
You can only designate one property as the deceased's principal residence for any specific year. However, where the principal residence is sold and another one bought (or where the deceased moved to another of his or her properties) in the same year, the “plus one” rule in calculating the principal residence exemption amount will allow you to claim the principal residence exemption for both properties for that year even though you can only designate one property as the deceased's principal residence.
For dispositions that occurred after October 2, 2016, if the deceased was a non-resident throughout the taxation year in which the property was purchased or acquired, the “plus 1” rule does not apply. In that case, this additional year should therefore be removed by overriding line 19 of Form T1255.
If you ticked box 1 at line 17900 of Schedule 3, you only need to complete the first page of this form. You do not need to report any gain amount on Schedule 3 for this property.
Definitions
For the purpose of this form, the acquisition date is the date on which the deceased person last acquired or reacquired the property, or December 31, 1971, whichever is later. However, if the deceased person or his or her spouse or common-law partner filed Form T664 or T664(Seniors), the deceased person or his or her spouse or common-law partner are not considered to have disposed of and immediately reacquired the property as a result of that election.
The term spouse used throughout this form applies to a person to whom the deceased person was legally married. For 1993 to 2000, a spouse included a common-law spouse. For 2001 and future years, the reference to spouse is replaced with spouse or common-law partner as defined in the "Definitions" section in Guide T4037, Capital Gains.
Note
If the deceased person made an election to have his or her same-sex partner considered his or her common-law partner for 1998, 1999, and/or 2000, then, for those years, the deceased person's common-law partner also can not designate a different housing unit as his or her principal residence.
Information needed to calculate the capital gain
If you ticked either box 2 or 3 at line 17900 of Schedule 3, you must complete the remainder of this form that is applicable to the deceased person's situation.
If the deceased person disposed of, or was considered to have disposed of, a property for which the deceased person or the deceased person's spouse or common-law partner filed Form T664 or T664(Seniors), Election to Report a Capital Gain on Property Owned at the End of February 22, 1994, use this form to calculate the capital gain for the year if:
- the property was the deceased person's principal residence for 1994; or
- you are designating the property in this form as the deceased person's principal residence for any tax year.
The deceased person may be entitled to a reduction as a result of the capital gains election. To calculate this reduction, use Form T2091(IND)-WS, Principal Residence Worksheet. To get this form, go to canada.ca/get-cra-forms or call 1-800-959-8281.