Regarding where the owner of a farm (the correspondent’s father) granted an option for consideration to sell his farm in 2005 (resulting in the recognition of a capital gain under s. 49(1)), and the option was exercised in 2006, CRA stated:
[S]ubsection 49(4) may allow your father to file an amended return for 2005 to exclude from income the proceeds he received for granting and extending the option. Your father would then get a refund of the tax paid in 2005.