CRA rejects CAE and considers that conversion of house inventory to personal use does not give rise to business income then or on subsequent sale

C.A.E. has not changed CRA’s view that the s. 45(1) deemed disposition rules do not apply where a home builder, who initially held a property as inventory, commences to use it a personal use property (PUP), and that "the treatment of any gain on the ultimate sale of the particular PUP would not give rise to a gain or loss on income account."

Neal Armstrong. Summary of 25 September 2015 T.I. 2015-0596921E5 under s. 45(1)(a).