Real estate

Real estate includes:

• vacant land;
• rental property (both land and buildings);
• farm property, including both land and buildings (other than qualified farm property); and
• commercial and industrial land and buildings.

For each real property you sold in 2011 that includes land and a building, you must:

• determine how much of the selling price relates to the land and how much is for the building; and
• report the sale of your land and building separately on Schedule 3.

To help you understand how to report a disposition of real property that includes land and a building, see this example.

If you dispose of a building and end up with a loss, special rules may apply. Under these rules, you may have to consider your proceeds of disposition as an amount other than the actual proceeds. For more information, see Selling a building in 2011.

Special rules may also apply if you dispose of, or are considered to have disposed of, a property that was your principal residence for 1994 and for which you or your spouse or common-law partner has filed Form T664 or T664(Seniors), Election to Report a Capital Gain on Property Owned at the End of February 22, 1994. If this is your situation, see Disposing of your principal residence.

Completing your Schedule 3

Report dispositions on lines 136 and 138 of Schedule 3.

Forms and publications

• Schedule 3, Capital gains (or losses)
• Guide T4037, Capital Gains