Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Would the CRA accept the filing of a resolution of the directors and Form T2054 where the amount of the capital dividend would be expressed in the form of a mathematical formula taking account possible post-closing adjustments?
Position: No. Reg. 2101 states that, among others, the prescribed form (T2054) and a certified copy of the resolution of the administrators authorizing the election shall be filed to the Minister. The CRA expects that such resolution will specify the amount of the dividend subject to the election under subsection 83(2) which should be the same as the one shown on Form T2054.
Reasons: According to the law.
2025 CTF Annual Tax Conference
CRA Round Table
Question 14 – Subsection 83(2) Election in the Context of a Subsection 84(3) Deemed Dividend
Does the CRA accept that a deemed dividend resulting from the application of subsection 84(3) may be the subject of an election under subsection 83(2), even though the exact amount of the dividend is subject to post-closing adjustments and the final amount of the deemed dividend is only known within a certain period of time following the point at which the dividend is deemed to be paid and received?
If so, does the CRA accept that the corporate resolution providing for the subsection 84(3) election may refer to a formula taking into account possible post-closing adjustments?
CRA Response
Pursuant to subsection 83(2), an election to pay a capital dividend can be made in the prescribed form and manner in respect of the full amount of a dividend. Section 2101 of the Income Tax Regulations describes the documents that are required to be filed with the election.
Such documents generally include a certified copy of a resolution of the directors to make the election and a schedule showing the computation of the amount of the capital dividend account immediately before the election.
The CRA expects such a resolution to refer to the amount of the elected dividend under subsection 83(2), which should correspond to the amount shown on Form T2054. This is consistent with the position set out in CRA Document No. 2020-0852211C6.
Olivier Bergeron
2025-108071
December 2, 2025
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