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Canada Revenue Agency 
 
T2101 E (09) 
 
ELECTION FOR GAINS ON SHARES OF A CORPORATION BECOMING PUBLIC 
 
- This form is for use by individuals to elect under section 48.1 of the 
Income Tax Act when their small business corporation ceases, immediately 
after that time, to be a small business corporation because its or another 
corporation's shares are listed on a designated stock exchange. 
 
- The intent of this election is to ensure that owners of qualified small 
business corporation shares do not lose their entitlement to the special 
capital gains deduction for gains accrued, but not realized, on their shares 
before the corporation ceases to be a small business corporation as indicated 
above. The special capital gains deduction amount increased to $750,000 from 
$500,000 effective March 19, 2007. By specifying any amount from the adjusted 
cost base up to the fair market value of the shares as proceeds of 
disposition, the owner can control the amount of taxable capital gain that 
will be brought into income for the elected disposition, and match that gain 
to the availability of the capital gains deduction. The shares are then 
considered as having been immediately reacquired at a capital cost equal to 
the elected proceeds of disposition. 
 
- The elected disposition does not apply for the purposes of sections 7 and 
35, or paragraph 110(1)(d.1) of the Act. 
 
- File one completed copy of this election: 
 
-- on or before the individual's filing-due date for the individual's tax 
year in which the corporation ceases to be a small business corporation; 
 
-- at the tax centre where the individual's income tax return is normally 
filed; and 
 
-- separate from any tax return. (You may put it in the same envelope with a 
return, but do not insert it in or attach it to the return.) 
 
- Sections, subsections, and paragraphs mentioned on this form are from the 
Income Tax Act. 
 
Do not use this area 
 
Name of individual (print) ^
 
Social insurance number/trust account number (Enter 9-digit) ^
 
Address ^
Postal code ^
Area code ^
Telephone number ^
 
Filing-due date (Year/Month/Day) ^
Name of small business corporation (print) ^
 
Date corporation became public (Year/Month/Day) ^
 
Address ^
Business Number (Enter 9-digit) ^
Postal code ^
 
Proceeds of deemed disposition 
 
Line 1: Adjusted cost base (ACB) to the individual of shares of the 
corporation immediately before going public ^
 
Line 2: Fair market value (FMV) of shares of the corporation immediately 
before going public ^
 
Line 3: Specified proceeds of disposition where (2) exceeds (1) - (see notes) 
^
 
Number of shares ^
Type of shares* ^
 
* If you need more space, attach a separate sheet. 
 
Notes: You may specify any amount from the ACB (1) to the FMV (2) as proceeds 
of disposition. 
 
The specified proceeds of disposition cannot be less than the ACB. 
 
Do not use this area 
 
Penalty for late-filed elections 
 
An election will be accepted up to 2 years following the individual's filing-
due date for the individual's tax year in which the corporation ceases to be 
a small business corporation, provided a penalty is paid at the time of 
filing. 
 
Calculation of late-filed penalty per subsection 48.1(4): 
 
Line A: Amount (3) above ^
 
Line B: Less: amount (1) above ^
 
Line C: Difference ^
Multiplied by one quarter multiplied by 1% multiplied by N* ^
= ^
 
Line D: $100 multiplied by N* ^
 
Line E: Late-filing penalty is the lesser of C and D = ^
 
Amount enclosed** ^
 
* N is the total of each month and any part month (if applicable) during the 
period from the filing-due day to the actual date filed. 
 
** Make cheque or money order payable to the Receiver General. Specify 
"T2101" on the remittance and indicate the tax year, the name, and social 
insurance number (or trust account number) of the taxpayer whose account is 
to be credited. 
 
Election and certification 
 
The above-named individual hereby elects to have the provisions of section 
48.1 apply and hereby certifies that the information given in this election 
is true, correct and complete in every respect. 
 
Signature of individual or authorized person ^
Date (Year/Month/Day) ^