Purchase of replacement property

When you sell a business property or when a property you own is expropriated, destroyed, or stolen, you may be able to elect to postpone or defer reporting the capital gain, recapture of capital cost allowance, or business income from disposing of property.

Provided you meet certain conditions, you may want to do this when you use the proceeds of disposition of the property to purchase a replacement property. The election may defer the tax consequences on the above amounts until you sell the replacement property.

For more information, see Income Tax Folio S3-F3-C1, Replacement Property.