Where in the ITA can I determine whether inheritance is included in taxable income?
I agree with most of what Sparky says above. However, his coments on the tax deferral of capital property only applies to transfer to the spouse of the deceased, but not to the children as inheritance. Subsection 70(6) of the Cdn ITA provides for an automatic spousal rollover, resulting in the testator not realizing any capital gains/losses as a consequence of his or for her death. On the other hand, for transfer to the children, there would be an immediate disposition resulting in capital gains or losses. However, the capital gain exemption may be claimed on the final tax return of the deceased.
