Commercial Property Tax Records to Assemble Before a Sale

1. Establish ownership and taxpayer continuity

Collect current and historical title, beneficial-ownership records, purchase and transfer agreements, partnership or shareholder records, reorganizations, trusts, estates, amalgamations and tax year-ends. Reconcile legal owner, beneficial owner and reporting taxpayer.

Identify non-arm's-length transfers, elections, rollovers, gifts, inheritances and changes in residency. Do not assume the last registered transfer established fair-market-value tax cost.

• Title and beneficial owner
• Acquisition and transfer agreements
• Entity and partnership records
• Tax year-end
• Elections and reorganizations
• Residency and related parties

2. Recover the acquisition closing file

Obtain the original agreement, amendments, statement of adjustments, lawyer's trust ledger, invoices, appraisals and tax allocations. Separate land, buildings, equipment, leasehold rights and other assets.

CRA states that land is not depreciable and acquisition costs can affect cost. The purchase allocation should reconcile to the tax and fixed-asset records used after closing.

3. Build the adjusted-cost-base schedule

Start with source-supported acquisition cost and applicable acquisition expenses, then identify capital additions, partial dispositions, assistance, elections and other adjustments. Link each line to an invoice, contract, completion evidence and tax treatment.

CRA says additions and improvements can be included in ACB while current maintenance and repair expenses cannot. Have the accountant classify ambiguous work rather than adding every capital-project invoice to land or building cost.

4. Reconcile CCA by class and year

Collect filed returns and CCA schedules for every ownership year, including capital cost, additions, dispositions, assistance, CCA claimed and closing UCC. Reconcile them to the fixed-asset ledger and financial statements.

Document separate classes for buildings, equipment, leasehold improvements and other property. Identify accelerated deductions, separate-class elections and assets no longer physically present.

5. Identify grants, rebates, insurance and other assistance

Compile government or utility grants, subsidies, rebates, GST/HST input tax credits, insurance proceeds and tenant or landlord contributions related to capital property. These amounts can affect capital cost, UCC, income or proceeds.

Record the recipient, legal basis, tax treatment and property or class affected. A deposit in the bank record is not enough to determine the adjustment.

6. Document use and changes in use

Maintain leases, occupancy records, related-party arrangements, floor-area schedules, business-use evidence, vacancy periods and conversion dates. Mixed residential, rental, owner-occupied and business use can require allocation or deemed-disposition analysis.

Replacement-property eligibility can depend on use in the year of disposition. Preserve the facts before space is vacated, re-leased or converted.

7. Prepare the sale-cost evidence

Obtain written brokerage terms, marketing invoices, legal estimates, environmental and engineering costs, lender payouts, discharge costs and other sale-related work. Separate costs incurred to sell from capital work and ordinary operating expenses.

CRA identifies selling commissions and sale legal fees in the capital-gain and recapture workstreams for rental property. The selected accountant should classify each actual cost.

8. Create a proposed allocation schedule

List land, each building, equipment, inventory, contracts and other included assets with seller book value, tax cost, UCC, proposed consideration and supporting evidence. Reconcile the schedule to the offer and offering materials.

CRA can review unreasonable allocations. Keep valuation evidence, transaction negotiation and tax effects visible rather than using one unsupported residual.

9. Keep GST, income tax and closing cash in separate tabs

Record GST registration, returns, elections, major improvements, use and proposed sale treatment. Keep GST on the property and services separate from capital gain, recapture and property-tax adjustments.

Build a seller cash schedule from price, debt, costs and adjustments, then attach—rather than merge—the accountant's tax estimate. This prevents a tax reserve from being mistaken for a legal payout or vice versa.

10. Control the file and unresolved items

Use an index showing document, owner, date, source, tax purpose, status, reliance and exception. Restrict sensitive tax and ownership records to approved recipients and retain version history.

Create an unresolved-items list for missing invoices, allocation, use, CCA continuity, ownership, grants, GST, replacement-property or filing questions. This checklist is general education, not a complete tax data request or confirmation that a record supports a deduction, cost or election.