Income Tax Act — I-3.3 70
olicy was issued) was a person whose life was insured, were the cash surrender value (as defined in subsection 148(9)) of the policy immediately before the particular individual died or became or ceased to be resident in Canada, as the case may be. Fair market value (5.31) For the purposes of subsections (5) and 104(4), the fair market value at any time of any property deemed to have been disposed of at that time as a consequence of a particular individual’s death is to be determined as though the fair market value at that time of any annuity contract were the total of all amounts each of which is the amount of a premium paid on or before that time under the contract if (a) the contract is, in respect of an LIA policy, a contract referred to in subparagraph (b)(ii) of the definition LIA policy in subsection 248(1); and (b) the particular individual is the individual, in respect of the LIA policy, referred to in that subparagraph. NISA on death (5.4) Where a taxpayer who dies has at the time of death a net income stabilization account, all amounts held for or on behalf of the taxpayer in the taxpayer’s NISA Fund No. 2 shall be deemed to have been paid out of that fund to the taxpayer immediately before that time. Where transfer or distribution to spouse or spouse trust (6) Where any property of a taxpayer who was resident in Canada immediately before the taxpayer’s death that is a property to which subsection 70(5) would otherwise apply is, as a consequence of the death, transferred or distributed to (a) the taxpayer’s spouse or common-law partner who was resident in Canada immediately before the taxpayer’s death, or (b) a trust, created by the taxpayer’s will, that was resident in Canada immediately after the time the property vested indefeasibly in the trust and under which (i) the taxpayer’s spouse or common-law partner is entitled to receive all of the income of the trust that arises before the spouse’s or common-law partner’s death, and (ii) no person except the spouse or common-law partner may, before the spouse’s or common-law partner’s death, receive or otherwise obtain the use of any of the income or capital of the trust, if it can be shown, within the period ending 36 months after the death of the taxpayer or, where written application therefor has been made to the Minister by the taxpayer’s legal representative within that period, within such longer period as the Minister considers reasonable in the circumstances, that the property has become vested indefeasibly in the spouse or common-law partner or trust, as the case may be, the following rules apply: (c) paragraphs 70(5)(a) and 70(5)(b) do not apply in respect of the property, (d) subject to paragraph 70(6)(d.1), the taxpayer shall be deemed to have, immediately before the taxpayer’s death, disposed of the property and received proceeds of disposition therefor equal to (i) where the property was depreciable property of a prescribed class, the lesser of the capital cost and the cost amount to the taxpayer of the property immediately before the death, and (ii) in any other case, its adjusted cost base to the taxpayer immediately before the death, and the spouse or common-law partner or trust, as the case may be, shall be deemed to have acquired the property at the time of the death at a cost equal to those proceeds, (d.1) where the property is an interest in a partnership (other than an interest in a partnership to which subsection 100(3) applies), (i) the taxpayer shall, except for the purposes of paragraph 98(5)(g), be deemed not to have disposed of the property as a consequence of the taxpayer’s death, (ii) the spouse or common-law partner or the trust, as the case may be, shall be deemed to have acquired the property at the time of the death at a cost equal to its cost to the taxpayer, and (iii) each amount added or deducted in computing the adjusted cost base to the taxpayer of the property shall be deemed to be required by subsection 53(1) or 53(2) to be added