ROUND TABLE - CGA - JANUARY 10, 1992
Officer: P. Diguer
File: 7-912220
QUESTION #15
Subsection 110.6(6) of the Act is designed to prevent a taxpayer from claiming the capital gains deduction where the taxpayer, knowingly or under circumstances amounting to gross negligence, fails to include a capital gain for the year in his/her income. In such a case, is it Revenue Canada's policy to disallow the capital gains deduction for life to an individual who has failed to report a capital gain for a previous year?
ANSWER
The capital gains deduction on a gain realized in a taxation year and not reported in the circumstances described in subsection 110.6(7) of the Act can be disallowed in the year of the gain or any subsequent year. However, other capital gains realized in subsequent taxation years which do not fall within paragraphs (a) and (b) of subsection 110.6(6) of the Act are eligible for the capital gains deduction provided in section 110.6 of the Act.