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.
Principal Issues: Does a capital gains election under subsection 110.6(19), in respect of a farm property, result in the property being last acquired after June 17, 1987 for purposes of paragraph (a) of the definition of "qualified farm property" in subsection 110.6(1).
Position: Yes
Reasons: Pursuant to subparagraph 110.6(19)(a)(ii), the property is deemed to have been reacquired by the elector immediately after February 22, 1994.
XXXXXXXXXX 2004-005706
(613) 957-8953
March 11, 2004
Dear XXXXXXXXXX:
Re: Capital Gains Election - Qualified Farm Property
This is in reply to your email of January 15, 2004, wherein you requested our views on whether a reacquisition of a farm property under subparagraph 110.6(19)(a)(ii) of the Income Tax Act (the "Act") results in the property being "last acquired" after June 17, 1987 for purposes of paragraph (a) of the definition of "qualified farm property" ("QFP") in subsection 110.6(1) of the Act.
When a valid capital gains election is filed in respect of a capital property, the property is deemed, pursuant to subparagraph 110.6(19)(a)(ii) of the Act, to have been "reacquired" by the elector immediately after February 22, 1994. Accordingly, as you are aware, it is our opinion that if the capital gains election is filed in respect of farm property, the property will be considered to have been "last acquired" after June 17, 1987 for purposes of paragraph (a) of the definition of QFP in subsection 110.6(1) of the Act. In our view, the reference to "last acquired" (emphasis ours) is broad enough to include a reacquisition of property.
We trust our comments will be of assistance.
Yours truly,
Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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