| Jurisdiction |
Federal U.S. income tax |
Federal Canadian income tax |
| Trigger event |
Death of the asset owner |
Death of the taxpayer |
| Valuation date |
FMV as of date of death |
FMV on date of death |
| Immediate tax at owner level |
No gain recognized by decedent |
Deemed sale of all capital property; reported on final return |
| Heir’s starting cost base |
FMV at death |
FMV at death |
| Tax on lifetime gains |
Eliminated for heirs |
Taxed in estate on accrued gains |
| Spouse/common-law rollover |
No special rollover; spouse inherits FMV basis |
Option to defer by rolling over at original cost base |
| Reporting |
Heirs report gains on sale |
Executor files Schedule 3 on final T1 |
| Principal residence |
Exempt for decedent; no step-up for heir |
Exempt in estate; heir inherits FMV base |
| Planning considerations |
Estate-tax planning (federal & state) |
Liquidity for estate taxes, valuations, rollovers |