When there is a change in use of a property you have, you may be considered to have sold all or part of your property even though you did not actually sell it.

A subsection 45(2) election allows you not to be considered as having started to use your principal residence as a rental or business property.

A subsection 45(3) election allows you to postpone reporting the disposition of your property until you actually sell it in most situations where you've changed your rental or business property to a principal residence.

There is no prescribed form for a subsection 45(2) or 45(3) election so you must send a letter to your tax centre describing the property and indicating you are electing under the relevant section of the Income Tax Act. You should indicate that you "need to file an election with this return" when you file your tax return.