Over the past year, I have had to prepare several tax returns that involved the disposition of property that was owned prior to 1994. If you remember back 15 years, that was the year that Revenue Canada (CRA) eliminated the general capital gains exemption on most types of assets. There was however, a one-time election (made on form T664) that allowed you to bump up the tax cost of the property by a maximum of $100,000. This election was filed by thousands of Canadians who wanted to reduce the future tax liability on their cottages or investments.
In most of the cases that have come across my desk recently, I was actually preparing final returns for deceased taxpayers. Their heirs had no idea of whether this election had been made (and in many cases did not even know the election existed). If you do still own property that you made an election on in 1994, make sure that you have copies of your 1994 return available, and that the executors of your estate are aware of it. Otherwise it is quite likely that the tax planning you prudently did back in 1994 will be wasted!
If you have already discarded your 1994 tax return, you can request a copy by contacting the CRA. Make sure to have your most recent tax return on hand when you call, since the CRA will ask you questions about it in order to confirm your identity. When making your request, also make sure to specify that you need the information on form T664, since they may otherwise just send you a summary of what was filed in the body of the main tax return.
There are many other issues that come into play when disposing of taxable property that has been held for a long time – if you are unsure of what might be involved, you should consult a tax professional to ensure that you do not pay income tax that might not be owed!