| 24(1) | 902363 |
| A.Y. Ho | |
| (613) 957-2094 |
19(1)
December 6, 1990
Dear Sirs:
This is in reply to your letter dated August 24, 1990 wherein you requested our opinion on the replacement property rules under subsections 44(1) and 13(4) of the Income Tax Act (the "Act").
Your questions
1. If the former business property disposed of consists of land and buildings, can a separate election be made with respect to each (i.e., defer the capital gain on the buildings but not on the land or vice versa)?
2. Is it possible to defer only a portion of the capital gain on either the land or building?
Our comments
With regard to your question 1, as stated in paragraph 4 of Interpretation Bulletin IT-259R2, the election under subsection 44(1) and 13(4) of the Act is on an asset by asset basis. Therefore, it is possible to defer capital gain on the buildings but not the land or vice versa.
With regard to your question 2, the elections under subsection 44(1) and 13(4) of the Act are to have the rules set out therein apply. There is no election with respect to the amounts determined under those rules. Therefore, it is NOT possible to defer a portion of a capital gain with respect to an individual property.
The above comments are based on the limited information submitted, do not constitute an advance ruling, and as such, are not binding upon Revenue Canada, Taxation.
Yours truly,
for DirectorBusiness and General DivisionRuling DirectorateLegislative and Intergovernmental Affairs Branch