Income Tax Act — I-3.3 70
he trust shall be deemed to be a trust described in subsection 70(6), except that, where the fair market value, immediately after the taxpayer’s death, of all of the properties so listed exceeds the total of the non-qualifying debts in respect of the taxpayer (the amount of which excess is referred to in this subsection as the “listed value excess”) and the taxpayer’s legal representative designates in the taxpayer’s return one property so listed (other than money) that is capital property other than depreciable property, (iii) the amount of the taxpayer’s capital gain or capital loss, as the case may be, from the disposition of that property deemed by subsection 70(5) to have been made by the taxpayer is that proportion of that capital gain or capital loss otherwise determined that (A) the amount, if any, by which the fair market value of that property immediately after the taxpayer’s death exceeds the listed value excess, is of (B) the fair market value of that property immediately after the taxpayer’s death, and (iv) the cost to the trust of that property is (A) where the taxpayer has a capital gain from the disposition of that property deemed by subsection 70(5) to have been made by the taxpayer, the total of (I) its adjusted cost base to the taxpayer immediately before the taxpayer’s death, and (II) the amount determined under subparagraph 70(7)(b)(iii) to be the taxpayer’s capital gain from the disposition of that property, or (B) where the taxpayer has a capital loss from the disposition of that property deemed by subsection 70(5) to have been made by the taxpayer, the amount by which (I) its adjusted cost base to the taxpayer immediately before the taxpayer’s death exceeds (II) the amount determined under subparagraph 70(7)(b)(iii) to be the taxpayer’s capital loss from the disposition of that property. Meaning of certain expressions in s. (7) (8) In subsection 70(7), (a) the fair market value at any time of any property subject to a mortgage or hypothec is the amount, if any, by which the fair market value at that time of the property otherwise determined exceeds the amount outstanding at that time of the debt secured by the mortgage or hypothec, as the case may be; (b) non-qualifying debt in respect of a taxpayer who has died and by whose will any trust has been created that would, but for the payment of, or provision for payment of, any particular testamentary debts in respect of the taxpayer, be a trust described in subsection 70(6), means any such particular testamentary debt in respect of the taxpayer other than (i) any estate, legacy, succession or inheritance duty payable, in consequence of the taxpayer’s death, in respect of any property of, or interest in, the trust, or (ii) any debt secured by a mortgage or hypothec on property owned by the taxpayer immediately before the taxpayer’s death; and (c) testamentary debt , in respect of a taxpayer who has died, means (i) any debt owing by the taxpayer, or any other obligation of the taxpayer to pay an amount, that was outstanding immediately before the taxpayer’s death, and (ii) any amount payable (other than any amount payable to any person as a beneficiary of the taxpayer’s estate) by the taxpayer’s estate in consequence of the taxpayer’s death, including any income or profits tax payable by or in respect of the taxpayer for the taxation year in which the taxpayer died or for any previous taxation year, and any estate, legacy, succession or inheritance duty payable in consequence of the taxpayer’s death. When subsection (9.01) applies (9) Subsection (9.01) applies to a taxpayer and a child of the taxpayer in respect of land in Canada or depreciable property in Canada of a prescribed class of the taxpayer in respect of which subsection (5) would, if this Act were read without reference to this subsection, apply if (a) the property was, before the death of the taxpayer, used principally in a farming or fishing business carried on in Canada in which the taxpayer, t