If you pay an amount to an employee (or to a person related to the employee) as compensation for a loss sustained on the sale of the employee's former residence or a decrease in the value of the residence following an eligible relocation (a "housing loss"), the amount constitutes a taxable benefit.

The value of the taxable benefit is equal to the result of the following calculation:

• one half of the result of the following calculation: the total amount paid in the year and in a previous year for the housing loss, minus $15,000 

minus

• the value of the benefit included in the taxpayer's income in a previous year with respect to the amount paid for the housing loss

At any given time, a housing loss is equal to the result of the following calculation:

• the greater of:
  • the highest fair market value (FMV) of the residence within the six-month period ending at that time
  • the adjusted cost base of the residence

minus

• the lesser of:
  • the FMV of the residence at that time
  • the proceeds of disposition, if the residence was disposed of before December 31 of the following year 

You have to include the value of the benefit in boxes A, G, I and L of the employee's RL-1 slip (see courtesy translation RL-1-T).