You do not pay Capital Gains at the time you inherit a property, only when you sell it. Any Capital Gains that should have been paid were the responsibility of the Estate and should have been reported on the Estate return or the deceased person's final return.
The beneficiary of a property is deemed to have acquired it at its Fair Market Value (FMV) at the time they acquired it. Although many people do not do this, you can avoid headaches by obtaining a legally convincing estimate of FMV (for example, a signed letter from an experienced appraiser) when you first inherit them. The reason is that you may someday have to pay capital gains tax on the asset if you decide to sell it, and the value at the time of inheriting the asset will be key in calculating how much tax you owe.
If no appraisal was done and you do not know what the value of the deemed disposition reported by the estate was, you may have to do a little detective work to find what the FMV was. Without proof of the fair market value, you may be forced to accept the Canada Revenue Agency’s estimate of its value, which could work against you if their estimate is low. As the registered homeowner, you should be able to access historical property assessment records or tax notices. This is not always the most accurate method if the home had improvements done that were not visible to the assessment authority, but it gives you a good basis. Also if you can find what similar properties were selling for in that area at the same time it will also help.
You do not pay Capital Gains at the time you inherit a property, only when you sell it. Any Capital Gains that should have been paid were the responsibility of the Estate and should have been reported on the Estate return or the deceased person's final return.
The beneficiary of a property is deemed to have acquired it at its Fair Market Value (FMV) at the time they acquired it. Although many people do not do this, you can avoid headaches by obtaining a legally convincing estimate of FMV (for example, a signed letter from an experienced appraiser) when you first inherit them. The reason is that you may someday have to pay capital gains tax on the asset if you decide to sell it, and the value at the time of inheriting the asset will be key in calculating how much tax you owe.
If no appraisal was done and you do not know what the value of the deemed disposition reported by the estate was, you may have to do a little detective work to find what the FMV was. Without proof of the fair market value, you may be forced to accept the Canada Revenue Agency’s estimate of its value, which could work against you if their estimate is low. As the registered homeowner, you should be able to access historical property assessment records or tax notices. This is not always the most accurate method if the home had improvements done that were not visible to the assessment authority, but it gives you a good basis. Also if you can find what similar properties were selling for in that area at the same time it will also help.
If no capital gains was paid (by the estate) when you inherited it, the value at that time was deemed to be the same as when whomever you inherited the property from acquired the property. So your land acquisition value would be that value, the amount paid by your loved one who bequeathed it to you.