Section 85 election form (Form T2057)

A seller meets this form when property goes into a taxable Canadian corporation in exchange for consideration that includes shares of that corporation. T2057 is the election; the rollover is the tax result. See what a section 85 rollover is and the spousal rollover entry.

What the Act sets

• The property must be eligible property, the transferee a taxable Canadian corporation, and the election made jointly in prescribed form (s.85(1)).
• The election is due on or before the earliest of the days any electing taxpayer must file a return under section 150 for the year of the transaction (s.85(6)).
• A late election is deemed made on time if, within 3 years after that day, it is made in prescribed form and an estimate of the penalty is paid (s.85(7)); the Minister may permit a later one where it would be just and equitable (s.85(7.1)).
• The agreed amount is overridden in some cases, such as when it exceeds the property’s fair market value (s.85(1)(b) and (c)).

What to ask

Ask the accountant completing the form which property it covers, what amount is elected and who files. Whether a rollover suits a deal is a tax question for a qualified professional.