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.
QUESTION I-100
DECEASED TAXPAYER-ELECTION UNDER SUBSECTION 70(6.2)
Subsection 70(6.2) provides that the legal representative of a deceased taxpayer may elect that the provisions of subsection 70(6) do not apply on the death of a taxpayer with respect to any property specified in the election (i.e., you can elect to have the transaction take place at fair market value rather than at tax values). This provision enables an individual to utilize capital losses, the capital gains exemption, etc. which might otherwise be lost.
If an individual has bequeathed a parcel of land with a fair market value of $100,000 and cost base of $1,000, can the legal representative elect under subsection 70(6.2) with respect to part of the property so that the capital gains exemption can be claimed?
ANSWER
As neither of subsections 70(5) or 70(6.2) refer to part of a property (subsection 70(5) refers to each property) the answer is no, the representative may not elect with respect to part of the property.
ADDITIONAL QUESTION
PARTNERSHIP - "PERSON"
The Department has expressed the view in the past that section 54.2 does not apply to a partnership which has disposed of all of the assets used in an active business. However, we understand that this position is under review. What is the present status of this review?
ANSWER
The Department has completed this review. A partnership is not a person and section 54.2 applies to a person. However, subsection 96(1) requires partnership income to be calculated as though the partnership were a separate person. Section 54.2 may be relevant for this purpose; accordingly, section 54.2 does apply to partnerships which have disposed of all of the assets used in an active business.
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© Sa Majesté la Reine du Chef du Canada, 1990
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