27 January 2003 Internal T.I. 2002-0177197 F - ATTRIBUTION DU GAIN A UN CONJOINT SEPARE -- summary under Paragraph 74.5(3)(b)

On the breakdown of their marriage, a couple held various immovable properties in equal co-ownership. Pursuant to a separation agreement, each transferred co-ownership interests to the other so that each became the full owner of properties. The Directorate indicated that, pursuant to s. 74.5(3)(b) of the Act, the attribution rules in s. 74.2(1) do not apply to dispositions of property occurring while they were living separate and apart by reason of their marriage breakdown and before their divorce, provided that they jointly elected pursuant to s. 74.5(3)(b) that s. 74.2 not apply.