Canada Inheritance Capital Gains Tax Calculator 2025

Calculate the deemed disposition capital gains tax on death and your estate's tax liability under CRA rules.

💡 Quick Example — See how the calculation works▶

Scenario: A deceased person owned three properties at death:

Family home — FMV $900,000, ACB $400,000, owned 20 years, designated as principal residence for 20 years
RBC shares — FMV $200,000, ACB $100,000, left to surviving spouse
Rental condo — FMV $500,000 (Land $150K, Building $350K), ACB $300K, UCC $180K, left to adult child

Family Home: Exempt = $500,000 × (1 + 20) / 20 = $500,000 → Taxable = $0

RBC Shares: Spousal rollover → $0 taxed at death

Rental Condo: Gain = $200,000 × 50% = $100,000 taxable
Building proceeds = $500K × (350/500) = $350K; Recapture = min($350K,$350K) − $180K = $170,000

Total Taxable Income at Death: $0 + $0 + $100,000 + $170,000 = $270,000

🌍 Global Information

Year of Death

Marginal Tax Rate

Deceased was a resident of Canada at death

🏠 Capital Properties Owned at Death

TAXABLE CAPITAL GAINS — Estate Tax Liability

Total FMV of All Properties $0

Total Adjusted Cost Base $0

Total Capital Gain (before exemptions) $0

Principal Residence Exemption −$0

Spousal Rollover (Deferred) $0

CCA Recapture (100% taxable) $0

Terminal Loss (deductible) −$0

      Net Taxable Capital Gain
      $0
    

      Total Taxable Income (Gains + Recapture − Terminal Loss)
      $0
    

💰 Estimated Estate Tax Liability

Tax on Capital Gains (43%) $0

Tax on Recapture (43%) $0

        Total Estimated Tax Owed
        $0
      

Estimate only — actual tax depends on the full income, credits, and provincial rates of the deceased.

📊 Per-Property Breakdown

Property	Type	FMV	ACB	Gain / (Loss)	Exemption	Recapture	Taxable Gain	Status
Add properties above to see the breakdown.

📋 Reporting Instructions

Complete Schedule 3 (Capital Gains or Losses) for the deceased's final T1 return.
Complete Form T1255 for any principal residence designation.
Complete Form T776 (Statement of Real Estate Rentals) for CCA recapture or terminal loss on rental property.
The estate files a T3 Trust Income Tax and Information Return for any sales that occur after death.
Capital losses in the T3 return can be carried back to the final T1 under subsection 164(6).

⚠️ Disclaimer: This calculator provides an estimate for informational purposes only. Actual tax treatment is determined by the Canada Revenue Agency (CRA) based on the deceased's final tax return and individual circumstances. Death triggers many complex rules (spousal trusts, graduated rate estates, provincial probate, non-resident rules, etc.) that this tool does not fully model. Always consult a qualified tax professional or estate lawyer.

❓ Frequently Asked Questions

What is a deemed disposition at death?

When a person dies, they are considered to have sold all their capital property at Fair Market Value immediately before death. Any resulting capital gain must be reported on the deceased's final T1 return, even though no actual sale occurred.

Who pays the capital gains tax when someone dies?

The tax is paid by the deceased's estate and reported on the deceased's final T1 return — not on the beneficiary's return. The estate pays out of the deceased's assets before distribution.

What is a spousal rollover?

Property left to a surviving spouse or common-law partner (or spousal trust) who is resident in Canada transfers on a tax-deferred basis at the deceased's Adjusted Cost Base. The capital gain is postponed until the spouse sells the property or dies.

What is the principal residence exemption at death?

If the property was the deceased's principal residence, some or all of the gain may be exempt. The formula is Gain × (1 + Years Designated) / Years Owned. You must still complete Form T1255 and report the disposition on Schedule 3.

What happens to RRSPs/RRIFs at death?

RRSPs and RRIFs are not subject to capital gains rules. Their full Fair Market Value is included in income as ordinary income at death (subject to spousal rollover). TFSAs are transferred tax-free to a spouse or to the estate (with some exceptions).

What is the flipping rule at death?

If the deceased owned a housing unit for less than 365 consecutive days before disposition, the gain would normally be treated as business income (100% taxable). However, death of the taxpayer or a related person is an exception, so the capital gains treatment and PRE generally still apply.

What is the T3 Return for an estate?

After the date of death, the estate files a T3 Trust Income Tax and Information Return for any property sold by the estate. The capital gain is generally the difference between the sale price and the FMV reported on the final T1 return.

Can the estate carry back losses to the final return?

Yes. Capital losses realized in the first taxation year of a graduated rate estate (GRE) can be carried back to the deceased's final T1 return under subsection 164(6), using Form T2043 or equivalent procedures.

Official CRA information: Doing taxes for someone who died · Prepare tax returns for someone who died

⚠️This tool is for information purpose only. We do not guarantee any claim.
It is made based on data publicaly available on official website of concerned department.

Last Updated: March 2026 | Official Determination Required

💰 Estimated Estate Tax Liability

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