T2057: Election on Disposition of Property by a Taxpayer to a Taxable Canadian Corporation
Reviewed by EverStone CPA · August 2026
Quick answer: Form T2057 is the joint election that lets you move property into a corporation without triggering the full tax on the gain. The taxpayer and the corporation both sign it, and it is due with the earliest return of anyone party to the transfer.
What the form is
T2057 is the prescribed form for an election under subsection 85(1) of the Income Tax Act. The CRA describes it as being “for use by a taxpayer and a Canadian corporation to jointly elect under subsection 85(1)”.
The point of a section 85 election is deferral. Transfer property that has grown in value into a corporation and you would normally be treated as having sold it at fair market value, with tax on the whole gain. The election lets the two parties agree an elected amount instead, somewhere between the tax cost and fair market value, so the gain is deferred rather than realised.
It is a joint election. Both the transferor and the corporation are party to it, and both sign. It is not something the corporation files on its own.
Who files it
Anyone incorporating an existing business and moving assets in, transferring real property or shares into a holding company, or reorganising ownership between related corporations.
In practice, the commonest small-business case is an unincorporated business being incorporated, where goodwill, equipment and receivables move into the new company.
The form at a glance
| Item | Detail |
|---|---|
| Legislation | Subsection 85(1) |
| Who signs | The taxpayer and the corporation, jointly |
| Due | The earliest day on which any party to the election has to file its return for the year the transfer happened |
| Filed late | Accepted up to three years late where the conditions are met, on payment of the penalty |
| Late penalty | Lesser of $8,000 and $100 per complete month |
What catches people out
A CRA account number is required at line 001 before the form can be filed. The CRA states this plainly: without an accepted account number — a SIN, business number, trust account number or individual tax number — the election cannot be submitted. Applying for one takes time, so it belongs at the start of a reorganisation, not the end.
Extra pages and your own templates are allowed for Schedule A, but the CRA requires the matching black-box line numbers and row numbers from the official form to be carried onto them, or the filing is delayed.
The due date is driven by whichever party files earliest, not by the corporation. An individual transferor with an April deadline can pull the election forward ahead of the corporation’s own year-end.
A late, amended or revoked election carries a penalty of the lesser of $8,000 and $100 for each complete month from the election’s original due date to the date the request reaches the CRA in a form it finds satisfactory. The CRA will generally not process the election until it is paid.
Common questions
When is the T2057 due?+
What happens if I file it late?+
Can I file it without a business number?+
Who has to sign it?+
Where this comes from
General information current as of August 2026, not advice for your situation. Elections are unforgiving about dates — confirm yours before you file. Please speak with a CPA about your circumstances.
Related reading
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