The right election filed at the right time can defer or permanently eliminate tax. Filed late — or not at all — it can undo an entire reorganization. We prepare, file and diarize them all.
Elections are where tax planning becomes real: most are valid only if filed in prescribed form, by a prescribed deadline, with the right supporting values. This is the core of the Taxcent portal — every election we file is diarized, documented and defensible.
| Election | Form | What it does | Deadline |
|---|---|---|---|
| Section 85(1) rollover | T2057 | Transfers eligible property to a taxable Canadian corporation at an elected amount — the foundation of incorporations of proprietorships, estate freezes and reorganizations | Earliest tax return due date of the transferor or transferee; late filing possible up to 3 years with a penalty ($100/month, max $8,000), and later only with CRA's discretion |
| Section 85(2) partnership rollover | T2058 | Same rollover where a partnership transfers property to a corporation | As above |
| Capital dividend election — 83(2) | T2054 + Schedule 89 | Pays tax-free capital dividends out of the capital dividend account (CDA); we verify the CDA with CRA before filing to avoid Part III penalty tax on excessive elections | On or before the day the dividend becomes payable; late elections accepted with penalty |
| Change-of-use — 45(2) | Letter with T1 | Deems no change of use when a principal residence becomes a rental — preserves the exemption up to 4 additional years (longer for work relocations) | With the return for the year of change; late acceptance is discretionary |
| Change-of-use — 45(3) | Letter with T1 | The mirror election when a rental becomes your home — defers the deemed disposition | With the return for the year the property is ultimately sold |
| Principal residence designation | T2091(IND) / T1255 | Designates which years a property was your principal residence on sale — mandatory reporting since 2016 | With the T1 for the year of sale; late designations attract a penalty of $100/month up to $8,000 |
| Section 22 — accounts receivable | T2022 | On a sale of business assets, converts the purchaser's bad-debt exposure into fully deductible business losses rather than capital losses | With both parties' returns for the year of sale |
| Subsection 50(1) — bad debts & worthless shares | Election in the T1/T2 | Crystallizes a capital loss on a debt gone bad or shares of an insolvent corporation without an actual disposition | Filed with the return for the year the debt/share becomes worthless |
| Replacement property — 44(1) & 13(4) | Election with return | Defers gains and recapture where business real property is expropriated, destroyed or voluntarily replaced within the statutory window | With the return for the replacement year |
| Non-resident rental — s.216 | T1159 return + NR6 | Lets non-residents pay tax on net rather than gross Canadian rental income; the NR6 undertaking reduces the 25% withholding during the year | NR6 before the first rent payment each year; s.216 return within 2 years (6 months where an NR6 was filed) |
| Non-resident pension — s.217 | T1 with election | Taxes Canadian pension income of non-residents at graduated rates instead of flat withholding, often generating refunds | June 30 of the following year |
| Disposition by non-residents | T2062 / T2062A | Certificate of compliance on a non-resident's sale of taxable Canadian property — limits the purchaser's withholding exposure | Within 10 days of the disposition |
| Functional currency — 261 | T1296 | Corporations may report in a qualifying foreign currency | Within the first 61 days of the year it is to apply |
| Late, amended or revoked elections | Request under 220(3.2) | CRA may accept late or amended prescribed elections where circumstances warrant — with a penalty of $100 per month, capped at $8,000 | Application-based; strong submissions matter |
Estate freezes (section 85/86), share-for-share exchanges (section 85.1), amalgamations (87), wind-ups (88), and purification transactions each carry their own election, valuation and price-adjustment-clause requirements. Taxcent prepares the tax filings that give effect to your lawyer's reorganization — with the working papers CRA expects to see if it ever asks.
Call 236 500 0011 or email info@taxcent.ca — we file with CRA for clients in every province and territory.
