The post-March 2010 narrowing of “taxable Canadian property” may scupper the s. 128.1(8) carry-back election

When an emigrating individual has elected under s. 220(4.5) to defer the payment of the tax resulting from the deemed disposition under s. 128.1(4)(b) of taxable Canadian property for its fair market value, he generally can elect under s. 128.1(8) to reduce the exit tax if he subsequently sells the property for proceeds lower than the deemed s. 128.1(4)(b) proceeds.

However, there’s a catch.  If, at the time of the subsequent sale, the property has ceased to be "taxable Canadian property" (as a result of the narrowing of this concept in the March 2010 budget), the s. 128.1(8)  carry-back election will not be available.

Neal Armstrong.  Summary of 24 October 2013 T.I. 2013-0486321E5 under s. 128.1(8).