24(1)
ROUND TABLE - JUNE 1990
| 900936 | |
| Don Sommerfeldt |
Question 11
May an election under subsection 70(6.2) be made with respect to a partial shareholding of a corporation? For example, a shareholder owns 1,000 shares of A Co. His will provides that on his death the shares are to be bequeathed absolutely to his spouse, in such a manner as to be subject to subsection 70(6). May an election under subsection 70(6.2) be made in respect of 100 of the shares, but not in respect of the other 900 shares?
The Department's Position
An election under subsection 70(6.2) may be made in respect of "any property of a deceased taxpayer." Since the word "property," as defined in subsection 248(1), includes a share, the Department is of the view that each of the capital stock of a corporation is a separate property in respect of which an election under subsection 70(6.2) may be made. Accordingly, in the above example, an election under subsection 70(6.2) may be made in respect of 100 shares of A Co., such that they will be subject 70(5), while the other 900 shares of A Co. will not be affected by the election such that they will be subject to subsection 70(6).