159(5) elections

An estate can file an election under subsection 159(5) of the Income Tax Act (Canada) using form T2075. The election permits the deferral of the payment of taxes owing as a result of the deemed disposition of property on death. Timing problems can arise, however, where it is necessary to obtain a valuation to determine the proceeds received for property. It does not appear to be possible to late-file or amend the T2075. As a solution to this problem, the authors suggest filing the T2075 without completing the portions that derive from the fair market value determination. The amounts can be added later when the determination has been completed.

Nadia Rusak and Manu Kakkar “Subsection 159(5) Election: Stuck Between a Rock and a Hard Place” 20:2 Tax for the Owner-Manager (April 2020)

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