Compliance & tax
T2057 (Section 85 election form)
Canadian tax form filed to elect Section 85 rollover treatment on a transfer of eligible property to a corporation.
Definition
Form T2057 (Election on Disposition of Property by a Taxpayer to a Taxable Canadian Corporation) is the CRA form used to make the joint election required under Section 85(1) of the Income Tax Act. Filed by both the transferor and the transferee corporation, it specifies the 'elected amount' that will be treated as the proceeds of disposition for the transferor and the cost to the corporation — enabling tax-deferred rollover treatment.
Same concept, different references
| Canada (CRA) | Form T2057 — joint election under s. 85(1) |
|---|---|
| Quebec (RQ) | Form TP-518 — equivalent provincial election |
| Filing deadline | Earlier of either party's tax return due date for the year of the transfer |
| Late filing | Permitted within 3 years with penalty under s. 85(7) |
When T2057 is filed
The T2057 must be filed any time a Section 85 rollover is used. Typical scenarios include:
- Founder transferring shares of one corporation to a holdco in exchange for shares of holdco (establishing a holdco-opco structure)
- Estate freeze: transferring shares to a new corporation as part of a freeze
- Roll-in of personal assets to a corporation (e.g., goodwill, business assets) in exchange for shares
- Asset purification: moving non-business assets between related corporations
- Reorganizations involving rollover of intercorporate property
What goes on the T2057
The form requires both parties to specify:
- The property transferred and its fair market value (FMV)
- The 'elected amount' — typically the property's adjusted cost base (ACB) for full rollover, or higher to trigger a partial gain
- The consideration received by the transferor (shares, debt, etc.)
- The signature of an authorized signatory of both the transferor (or their agent) and the transferee corporation
Filing mechanics
Critical T2057 mechanics that often trip up first-time filers:
- Filing deadline: the earlier of the transferor's or the transferee's tax return due date for the year that contains the transfer. Late filing penalty under s. 85(7) is 0.25% per month, up to a maximum of 24 months
- Joint signing: both parties must sign. A common error is one party filing without the other's signature, which invalidates the election
- Elected amount restrictions: the elected amount must be at least the property's ACB (no loss creation) and at most its FMV (no benefit conferral). Specific rules apply to inventory, capital property, and depreciable property
- Provincial filings: in Quebec, a parallel TP-518 must be filed with Revenu Québec for the same transaction
In Octelligence
Section 85 rollovers tracked at the corporation.
Octelligence records share issuances in connection with Section 85 rollovers, with documentation links to the underlying T2057 election and supporting valuation.
View digital corporate recordsCanadian tax structuring
Track every Canadian tax structure at the share level.
Holdco-opco, estate freezes, intercorporate dividends, safe income, GRIP, CDA. Recorded against the corporation, surfaced when relevant.