CRA will not provide relief where there are COVID-related delays in meeting the deadline of realizing a loss for s. 164(6) carryback within an estate’s first taxation year

In order for the s. 164(6) carryback of a capital loss by an estate to the terminal year to be available, the executors must dispose of the capital property in question within the first taxation year of the estate. Could CRA allow more time for the disposition given that there may be COVID-related or other delays in the probate process? CRA responded that the extensions accorded under the COVID-19 Time Limits Act did not apply here, and stated:

[W]hile we understand that delays in the probate process may delay the timing of the disposition of the properties of an estate, the CRA is unable to extend the time limit for the dispositions in subsection 164(6) … beyond the first taxation year of the graduated rate estate.

Neal Armstrong. Summary of 16 October 2020 External T.I. 2020-0865071E5 under s. 164(6).