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Rollovers Under Subsection 70(6)

The death of a person causes a bunching of income recognition, usually for accrued but unrealized gains on capital property, that can result in significant tax liability for the deceased and the resulting estate. This is because the Income Tax Act deems a person to have sold and reacquired all of their capital property immediately before death at their FMV.

A rollover is available where property otherwise deemed disposed is transferred to the deceased person’s spouse or common-law partner. The rollover is in subsection 70(6), and applies where capital property is left by a taxpayer resident in Canada to that taxpayer’s spouse or common-law partner also resident in Canada. The rollover is automatic but can be elected out of. In some circumstances, it may be more advantageous to not have property rollover.

Interestingly, the term “spouse” is not defined in the Income Tax Act, but the phrase “common-law partner” is. The interaction of the definitions would appear to make it possible for a person to have both a spouse and one or more common-law partners at the same time.

Question

Can the rollover provision in subsection 70(6) be applied to a transfer to a spouse and also to a common-law partner?

Answer

Provided all the conditions in subsection 70(6) are met, the rollover would automatically apply to the property transferred to each of the spouse and the common-law partner.

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Response from the owner:Many thanks and much appreciated for the kind and positive review.
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Response from the owner:Thank you for the positive review.
This is an announcement from Aaron Baer, legal counsel to Faris CPA.

I have been working with Faris CPA for more than 10 years.

Faris CPA is being attacked by Kenneth John Weakley (Oct 1969).

I am posting this review because Kenneth John Weakley has been deleting his reviews and has been reposting them, so that Faris CPA's responses don't always show up.

Faris CPA's position is as follows:

Faris CPA is a well-regarded firm that is compliant with CPA Ontario obligations and has a good track record.

Under no circumstances will Faris CPA be paying Kenneth John Weakley any amount.

Kenneth John Weakley's claims do not have any merit.
Response from the owner:Thank you Aaron for your help. Here is my response to Kenneth John Weakley’s fake reviews: “ A warning about fake Google reviews posted by Kenneth John Weakley. He has been posting fake Google reviews under KenW and ShahramK (or variations) about our firm and other professionals. Kenneth John Weakley keeps posting and removing and reposting fake reviews so that his reviews will stay on top and so that our reply will not show up. We searched him and we found out the below information and that he has been posting those reviews from U.K. Kenneth John Weakley DOB October 20, 1969 Address: 821A Fulham Road, London, U.K. SW6 5HG ( Title: NGL449634) Kenneth John Weakley has been attacking the below professionals as well: David Rotfleisch @ Taxpage Marek Tufman Aaron Baer He has been demanding 25k from our firm and from the above professionals to stop posting those reviews. We wish to emphasize that our firm has always complied with our professional obligations, and the interpretation suggested in the fake reviews does not accurately reflect those obligations. We remain committed to serving our clients with professionalism, transparency, and integrity. We are a well-regarded firm and have a good track record. Please see below link to review our record with CPA Ontario. https://www.cpaontario.ca/protecting-the-public/directories/member/faris-6gchzu”