Election to not report the capital gain or loss

If you are living apart because of a breakdown in the relationship, you may not have to report the capital gain or loss when your spouse or common-law partner sells the property. In such a case, you have to file an election with your income tax and benefit return.

For transfers of property made after May 22, 1985, you can file this election with your return for any tax year ending after the time you separated. However, for the election to be valid, you have to file it no later than the year your spouse or common-law partner disposes of the property. To make this election, attach to your return a letter signed by you and your spouse or common-law partner. State that you do not want section 74.2 of the Income Tax Act to apply.

For transfers of property made before May 23, 1985, you have to file the election with your return for the tax year in which the separation occurred. To make this election, attach to your return a letter signed by you and your spouse or common law partner. State that you do not want subsection 74(2) of the Income Tax Act to apply.

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