According to the Canada Revenue Agency (CRA): “To make this election, attach a letter signed by you to your income tax and benefit return for the year in which the change occurred. Explain the premises and state that you are looking for subsection 45(2) of the Income Tax Act to apply.”
Therefore, there is no specific form to submit to claim this option.
A Canadian taxpayer can extend the four-year limit indefinitely, but this requires your employer or your spouse's employer to ask you to move. It sounds like you've moved to find a job, Hugh, so this extension won't work.
Late filing of election
A 45(2) election must be filed in the year you leave home. The deadline is the deadline to file your tax return for that year. This will be April 30 for most taxpayers, and June 15 for self-employed or self-employed spouses.
The CRA can accept a late election under subsection 45(2), if your situation is similar to one of the exceptional circumstances listed.
There is a law that supports late filed elections. In the case of Irene Gjernes v. Canada Revenue Agency, CRA has been ordered to reconsider a 45(2) election that was denied and filed late by a taxpayer despite exceptional circumstances.
For late-filed elections, the CRA may charge a penalty of the lesser of $8,000 or $100 per month before the due date. If the tax savings are greater than the penalty, a late filed election may qualify for a penalty penalty.
Capital gains tax when you change the use of the property
Since a home that is converted into a rental property is subject to the condition assumed at the time of the conversion, the fair market value at the time the rental commences is the adjusted cost basis (ACB) for capital gains tax purposes. A subsection 45(2) election can postpone this conversion date.
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