A retroactive deemed disposition gives rise to a retroactive s. 116 filing requirement

You are a non-resident who converted your Canadian recreational property to rental use in Year 1, and elected under s. 45(2) for there to be no change-of-use deemed disposition.  In your return for Year 3, you revoke the election so that you are deemed to have disposed of the property at fair market value on January 1 of Year 3.

CRA considers that the deadline for you to apply for a s. 116 certificate is January 11 of Year 3.  Given that you did not make this deadline, this presumably means that you are liable to remit 25% of the property’s FMV to the fisc.

Neal Armstrong.  Summary of 25 September 2013 T.I. 2013-0485751E5 F ("Rescinding 45(2) election by a non-resident") under s. 116(3).