Mother-in-law, a Canadian Citizen, passed away on Jan 30, 2017. She had pension income for Jan/2017 only, and had no other Canadian assets except for a property in Hungary she inherited from her mom in 1983 along with her 2 siblings. The cost base of the foreign property was worth less than $100,000 at that time. The property has been sitting idle since then, and maintained by her sibling’s daughters living in Hungary … . Pay taxes, cut grass, etc. It is not an income generating property and was solely used for personal use. There used to be a house on the property to vacation, but over time it collapsed, and now just a piece of land. We completed her 2017 Final T1 tax filing a few months ago and added a note saying that her portion of the foreign land she inherited in 1983 was worth less than $100,000. We recv’d back her notice of assessment from Revenue Canada indicating no money is owed.
It has come to our attention last week, that the inheritors in Hungary, want to sell the property as they can no longer maintain it. We were told that it may be worth $600,000 Canadian divided by 3 inheritors. Her share of the property may be $200,000 less expenses to sell. This would be divided between her 3 beneficiary children living in Canada. A lawyer will be hired in Hungary to handle deed transfers of names and sale of property. We are hoping the sale to be completed by Aug/2018.
What is your advise as to how we should go forward in reporting to Revenue Canada. How should we now report the deemed disposition of the foreign property upon death …. when we knso little about cost and sell price. now that we plan to sell the property by summer. relative of the capital gain upon death or after the sale of the mothers’ Final T1, capital gains after the sale of the foreign property to the 3 beneficiary children.
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