# Capital Gains on Inherited Properties



## cynbad (Feb 20, 2012)

My mother died in 2010 and left my brother and I 2 parcels of land and property with a farm. In 2012, we sold the farm and 1 of the parcels. I'm pretty sure we don't have to pay tax, but I just want to confirm this. My taxes are so simple that I do them myself on Ufile. I don't want to pay for the services of an accountant if I don't have to. Any advice would be appreciated.


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## caricole (Mar 12, 2012)

Be carefull

The farm, if used as principal residence, is most probable exempt

But the farmland is not nescessarely exempt

Only if it is *acceptable farmland*

To qualifie for the 100K life exemption, the deseased person had to produce a MINIMUM OF 50% of his INCOME for the last 2 years from this farm

Otherwise the farmland becomes subject to capital gain

Now a litle detail

If the house (farm) is principale resident, you can take 1/2 Hectare of land that is part of the house

The rest is subject to capital gains tax

Where to find the values, in the MUNICIPAL TAXES...they indicate the value of the dwellings and separatly the value and surface of the land

So 1/2 hectare is déducted from the value of the land and added to the value of the house

Hope it helps, it is simple, you dont need an accountant...they do not know the detail of the 1/2 hectare

:encouragement:


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## iherald (Apr 18, 2009)

It also depends on how the property was determened when it was transferred to you. If it wasn't a principal residence for your Mom, then her estate would have paid capital gains taxes on it. There would then be a new adjusted cost base (the value at the time of her death). So you'd only owe capital gains (or losses) from that new ACB to the sale price.


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## Guban (Jul 5, 2011)

iherald said:


> It also depends on how the property was determened when it was transferred to you. If it wasn't a principal residence for your Mom, then her estate would have paid capital gains taxes on it. There would then be a new adjusted cost base (the value at the time of her death). So you'd only owe capital gains (or losses) from that new ACB to the sale price.


Even if it was your mom's prinicipal residence, shouldn't the OP's ACB be the fair market value at the time he received it?


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## MoneyGal (Apr 24, 2009)

Most transactions between non-arm's-length persons are deemed to take place at FMV, with some notable exceptions. In this case, if the facts are correct, OP receives the asset at FMV and pays tax on the gain from FMV at time of acquisition to sale price.


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