A couple purchased a cottage in 2001, rented it out for four years as requested by the vendor, then in 2005 commenced to use it for personal use. Before indicating that there likely would be a deemed disposition under s. 45(1)(a)(iii) on the change to personal use in 2005 unless the election under s. 45(3) was made and the property commenced to be used as a principal residence, CRA stated:
[T]he fact that there was four years of rental income would be, prima facie, an indication that is was purchased for the purpose of gaining or producing income.