28 March 2003 External T.I. 2003-0006665 - AMENDED SUBSECTION 110.6(19) ELECTION110.6(19)

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 CCRA.

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

DOCUMENT TYPE: Opinion

Principal Issues: Can an individual amend a subsection 110.6(19) election in 2003?

Position: No.

		2003-000666
XXXXXXXXXX 	Karen Power, CA
(613) 957-8953
March 28, 2003

Dear XXXXXXXXXX:

Re: Election for Property Owned on February 22, 1994

We are writing in reply to your facsimile of March 5, 2003, wherein you requested our views on whether an individual would be entitled to file an amended capital gains election pursuant to subsection 110.6(19) of the Income Tax Act (the "Act").

Our comments

Written confirmation of the tax implications arising from proposed transactions is given by this Directorate only where the transactions are the subject matter of an advance income tax ruling request pursuant to Information Circular 70-6R5. Where the particular transactions are completed the inquiry, including all related documentation should be addressed to the relevant tax services office. However, we are prepared to provide you with the following general comments.

Subsections 110.6(19) to 110.6(30) of the Act set out rules in connection with the election relating to the elimination of the $100,000 capital gains exemption. In broad terms, these provisions allowed certain individuals to make elections with respect to the crystallization of unrealized gains on February 22, 1994. For individuals (other than trusts), pursuant to subsection 110.6(24) of the Act, the election was generally required to be filed on or before April 30, 1995 or, in certain limited circumstances, on or before the day when the individual's Part I tax return for 1995 was required to be filed. However, subsection 110.6(26) of the Act specifically permitted the filing of a late election within two years after the applicable filing deadline provided an estimate of the amount of the penalty described in subsection 110.6(29) of the Act was paid at the time the election was filed. In addition, subject to subsection 110.6(28), subsection 110.6(27) of the Act permitted an election under subsection 110.6(19) of the Act in respect of a property or a business to be amended at any time before 1998 provided certain conditions were met and subsection 110.6(25) of the Act permitted an election under subsection 110.6(19) of the Act to be revoked at any time before 1998. Since the deadlines specified in subsections 110.6(25) to 110.6(27) have all passed, a capital gains election cannot be revoked, late filed or amended in 2003.

Subsection 220(3.2) of the Act also deals with late, amended and revoked elections.

It provides that the Minister may, on application by the taxpayer, extend the time for making an election or allow the amending or revoking of an election under a provision of the Act, or a regulation, that is a prescribed provision. Section 600 of the Income Tax Regulations ("Regulations"), contains the prescribed provisions for the purposes of subsection 220(3.2) of the Act. Section 600 of the Regulations does not make any reference to elections under subsection 110.6(19) of the Act, accordingly, there are no provisions which would allow a taxpayer to late file, amend or revoke the election otherwise permitted under subsection 110.6(19) of the Act in 2003.

We trust our comments will be of assistance to you.

Yours truly,

Milled Azzi, CA
for Director
Business Incentives Section
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

- 2 -