Quote:
Originally Posted by Paulie Walnuts
That seems low they didn’t have any RSP or RRIF accounts? Aren’t those taxed dollar for dollar v
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There was some money in an RRIF ($80K or so), but most of the original amount was drawn down earlier in retirement. Just from memory, but I think the rough breakdown of assets was:
$1.5M primary residence
$500K secondary residence (w/ ~$250K gain)
$400K cash and other income generating holdings (so no real capital gains)
$250K TFSA (incl. room from deceased spouse)
$250K non-registered equities (w/ ~$75K unrealized gain)
$80K RRSP
So the final tax return was $325K in capital gains ($162.5K in income) and $80K in RRIF income. In BC, that results in about $80K in tax. I suppose to be fair, they did die early in the year, so their non-deemed disposition income was very low. But even if they had earned their normal income in the year they died, the ~$242K in deemed disposition income would still only result in about $100K in income taxes in BC, which is 3.33% of their estate value.
I guess if someone has a massive RRSP and dies, then they'll see a higher hit. But that's certainly not typical. Most people will have the vast majority of their net worth in assets that don't get taxed at death (principal residence, cash, TFSA, etc.) and the median RRSP value at age 65 is only about $100K.