Hello, it would be great if anyone can confirm my understanding about the following scenario:
A dies on June 1, 2025 (Cost=$500,000, FMV=$1M). Under the will, the rental property is to be transferred to A’s spouse. The estate settlement is completed on June 1, 2026 (FMV=$1.5M).
- On June 1, 2025: The 70(6) rollover applies automatically, so no tax consequence for A at death.
- From June 1, 2025 to June 1, 2026: An estate return (T3) is required to report the rental income.
- On June 1, 2026: A’s spouse receives the property at A’s original cost of $500,000 per 70(6).