1) In the given situation, is the estate eligible to make the subsection 164(6) election?
2) (a) Is the estate eligible to make the subsection 107(2.001) election when it distributes the residence to the residual beneficiary? (b) Do subsections 40(3.3) and 40(3.4) apply to the capital loss?
2) (a) The estate can submit an application to the Minister pursuant to subsection 220(3.2) of the Act requesting an extension of time to make an election or to obtain permission to amend or revoke an election already made. 2(b) Yes
1) As the transfer of the residence was part of the distribution by the estate to the residual beneficiary and was not a sale to the beneficiary, no capital loss should result for the estate from the deemed disposition and, accordingly, a subsection 164(6) election cannot be made.
2)(a) Under Regulation 600, subsection 107(2.001) and subsection 164(6) are prescribed provisions as referred to in subsection 220(3.2). 2(b) The residual beneficiary is a person affiliated to the estate and the other conditions of subsection 40(3.3) are met.