Do You Need to Think About Estate Taxes or Is it Capital Gains-Losses?
As a general rule there are three topics of conversation that most people like to stay away from. These are death, taxes and religion. While religion can certainly be left up to the individual unfortunately death and taxes are two issues that will have an impact on others besides an individual. There comes a time when everyone who passes on leaves a responsibility of filing the final taxes. However, for Canadians technically there is nothing formally known as estate taxes but a close proximity to it is the disposition of any capital property that happened to be owned at the time an individual passed away. The value of this property is determined by what the fair market value of the property is at the time the person became deceased. This value will determine if there will be gain or loss that has to be calculated in when the income tax is being prepared.
Often when an individual thinks about property they are simply thinking about real estate while in this case it can have many different meanings. Within these tax obligations you may find that there is a registered retirement savings plan that has to be dealt with, or perhaps a registered retirement income fund. These may very well be fully taxable, but not if they were left to the spouse of the person who passed away or to a minor child who was their dependant.