In any event, this discussion has now left the starting point and I’m out.
Here’s a question - what is lost by reporting the disposition?
In most cases, an unnecessary cost passed on to the taxpayer by an accountant who bills for every jot and tittle validated by the ITA, whether necessary under the circumstances or not. I couldn’t help but add this comment as I followed this discussion. I bend my back for all the strokes I will receive for this, but will not complain.
Yeah, damn those accountants who bill for their time and care whether the tax filings are complete, apparently?
I said I was “out”, but I cannot let this go:
There is a difference between “accuracy” and “precision”. One is generally compliant and costs less, the other is specifically compliant in every detail, and costs significantly more.
The question is not “what is lost” but “is the result of accuracy to both CRA and the client worth the difference in cost to that of precision” when both reach the same tax number and results. In this case, whether the rollover disposition is reported or not, the tax exigble is NIL.
We are splitting hairs on this thread. Both approaches are correct and accepted by CRA. Whether or not the election occurred is a question of the legal facts of the case, not the mechanics of reporting it on the tax return. There is absolutely nothing in the ITA that says the transaction must be reported on schedule 3 for the election to have been considered to have taken place.
Do you report sales of personal use property when there is a denied loss? I certainly do not (unless it’s real estate). And the only reason I report the real estate is because CRA has asked us to in their administrative policies.
Remember the ITA is the law but the CRA interprets and administers the law. If they say the election is automatic when the appropriate legal facts exist, then why are we still discussing this?
It’s a discussion that will go nowhere, I hope I am not adding more to it, I gave up trying to argue things like this a while ago. One thing you nailed it there, “ITA is the law but the CRA interprets and administers the law”, a lot of the time, I find tax preparer interpret the law to their liking, using 2 analogies, they did it before, so must be okay, no court case, so must be okay. One thing I asked when that comes up now is, I don’t mind getting a ruling form CRA if you are certain what you said is acceptable, most the time, people back down. I would do that if I think I have a strong case, do it for free, for the sake of learning something, we paid more in PD, it’s a great learning