Transfer of farmland to a child

If all 4 conditions to use the special amount for the deemed proceeds are met, you can choose to have the deemed proceeds equal to the adjusted cost base of the land right before death. Therefore, the deceased will not have a capital gain or loss.

Tax Tip

You can elect not to have the deemed proceeds equal the adjusted cost base. If you make this choice, you can transfer the land for any amount between its adjusted cost base and fair market value right before death. You have to make this choice when you file the final return for the deceased.

You may want to do this to claim the capital gains deduction or a net capital loss on the final return. It may be more beneficial to report a capital gain or loss on the final return instead of deferring it to a child.

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