Would CRA allow more time for the application of s. 164(6), given that delays in the probate process may delay the timing of the disposition of the estate’s properties? CRA responded:
[F]or [s. 164(6)] to apply, the legal representative must dispose of the capital property of the estate or all of the depreciable property of a prescribed class … within the first taxation year of the estate. …
Furthermore …[t]he COVID-19 Time Limits Act temporarily enables the Minister responsible for the application of a federal Act … to suspend or extend certain time limits … for a maximum of six months, by order. The specified Acts of Parliament and regulations are identified in the schedule [thereto]. Although certain provisions of the Act are mentioned therein, no reference is made in this schedule to subsection 164(6).
As such, while we understand that delays in the probate process may delay the timing of the disposition of the properties of an estate, the CRA is unable to extend the time limit for the dispositions in subsection 164(6) of the Act beyond the first taxation year of the graduated rate estate.