14 May 2001 Ministerial Correspondence 2001-0078644 - ELECTION TO REPORT CAPITAL GAIN - LATE

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

May 14, 2001

XXXXXXXXXX

Dear XXXXXXXXXX:

The Honourable Martin Cauchon, Minister of National Revenue, has asked me to reply to your correspondence of March 20, 2001, concerning the deadline to file an election to report a capital gain on property owned at the end of February 22, 1994.

In certain cases, the Minister of National Revenue may accept late filed elections under the fairness provisions of the Income Tax Act. However, as in your case, where a statutory deadline exists for a late filed capital gains election, the Minister does not have such discretion and is bound by the legislated deadline. In this regard, the capital gains election was generally due at the same time as the 1994 tax return; however, the Act specifically allowed a two-year extension to file this election, provided that the applicable penalty was paid. Furthermore, while our tax system is one of self-assessment, the publications of the Canada Customs and Revenue Agency (CCRA) for the 1994 taxation year highlighted the elimination of the capital gains deduction and the related election.

The role of the CCRA is to administer and enforce the Act as passed by Parliament. The Department of Finance is responsible for tax policy and proposed changes to the Act. As the concerns raised in your letter relate to tax policy, which is the responsibility of the Department of Finance, I have sent a copy of your correspondence to Mr. Munir Sheikh, Assistant Deputy Minister, Tax Policy Branch of that department, for his consideration.

I appreciate being made aware of your concerns.

		Yours sincerely,

		Bill McCloskey
		Assistant Commissioner
		Policy and Legislation Branch

C.C. Mr. Munir Sheikh

Assistant Deputy Minister
Tax Policy Branch
Department of Finance