Section 38.01

Variable E extending to transferee (pp. 4-5)

• Variable E of the formula in s. 38.01 of the August 12, 2024 draft capital gains legislation (allowing an election for the $250,000 threshold to be used for capital gains of an individual from dispositions or deemed dispositions described in any of s. 13(7)(b), (d) or (e)) seems to allow a taxpayer that has acquired capital property and made a joint election with the transferor under 13(7.7) to deduct up to 50% of the amount covered by the election even though the transferee realized no gain on the transfer. Variable E refers to the amount covered under the election but seems to apply both to the transferor and transferee. [This is corrected in the September 23, 2024 Notice of Ways and Means Motion by adding a reference in E to the elected amount being an amount relating to a capital gain of the taxpayer under s. 13(7)(b), (d) or (e)).