Inheritance

[August1991]

In Canada, there is no "estate tax".

But when a person dies, the entire estate is sold - including RRSP, home, cabin/cottage/chalet -and becomes an "income".

It is taxed as income.

[CdnFox]

On 8/9/2025 at 5:41 PM, Nationalist said:

Yup. I been-a-thinkin' the same.

I will say this, i have seen with my own eyes MANY times how families that are loving caring or at least decent to each other absolutely lose their crap entirely when someone dies and fight like demons over things both big and small.  It's insane. 

I've also had to help a few people who didn't have any money get through probate because they couldn't' afford a lawyer and they were crushed from their loss. 

Having a strong will done by a professional and considering things like which lawyer firm will assist and make sure there's the insurance to fund that is the kindest thing you can do for your family.  It's worth every penny, and makes sure that people remember 'the day we lost a man we love' instead of 'the day the war started'. 

[herbie]

20 hours ago, August1991 said:

But when a person dies, the entire estate is sold - including RRSP, home, cabin/cottage/chalet -and becomes an "income".

Not so. The principle residence home is NOT included as income. A cabin is included as a Capital Gain, taxed at 50%.
The inheritor of a home may have to pay a small tax to transfer the title, or if they already own a home if and when and sell it, they pay a capital gain tax on it.
A cabin - well ours had 3 inheritors, so the money can be split 3 ways taxed as $25K extra personal income that was far less than on $75K extra estate income. There are legal ways to not pay more than you have to.

So if you inherit a home and don't want to live in it, rent it out and make an income! You don't pay any capital gain tax until you sell it. All the maintenance, repairs and renos can be written off against the income and the sale price. No way to lose... you didn't pay for it in the first place.

 

[August1991]

On 10/4/2025 at 5:13 PM, herbie said:

Not so. The principle residence home is NOT included as income.

...

The inheritor of a home may have to pay a small tax to transfer the title...

 

Herbie,

You must be a small-town lawyer or a smart accountant.

I am neither.

[herbie]

Was a tax loopjhole hunter back in the 1980s and engaged to a woman CGA that ran an income tax service.
Plus a little experience with inheritances. The wife passed with no will and it was almost 2 years of paperwork. The parent's with a will went on for a decade. Investments and US holdings that didn't turn up for years, summer cabin that we kept using for a while, etc. etc.
But I was really annoyed at that headline implying that the woman who inherited owed the taxes, not the estate.