1031 Exchange and Accelerated depreciation - CRA recognition?
Hi there,
For Canadian residents, I was wondering how the CRA treats accelerated depreciation income and 1031 exchange of commercial properties held under a C-corp in the US? Lets use a case study:
Property purchased for 3M, yielding 210k NNN.
Cost segregation study- allowing for depreciation of 210k in year one.
Net income post depreciation = 0. Taxes due in US = 0.
1. Is there any tax due to CRA?
2. If there is a dividend or salary of 50k drawn from the C-corp for that year. How does the IRS and CRA look at this in that instance?
3. If the property is sold 5 years later for 3.3M, having depreciated 600k by then and rolled into a 1031 exchange, what are the liabilities to CRA?
Thank you experts!