If the deceased’s original cost for an asset cannot be found amongst their personal papers or their records with a financial institution, the executor, with the help of an accountant, is responsible for coming up with a reasonable number and must be prepared to defend that number if questioned by CRA.

If, for example, the deceased owned a stock that the executor thinks was purchased sometime during a 2 year period, they might use the average trading price per share over those 2 years as the deceased’s cost and be able to provide documentation showing that average price.

If the deceased purchased a piece of real estate, the executor could consult a realtor experienced in that area or a real estate appraiser to come up with a reasonable estimate of what the property was worth that year.

Trying to establish asset costs is a frustrating business if the deceased did not keep good records. As long as the executor can establish that the asset was purchased during a certain time period and is able to provide a range of values, or an average value, for the asset during that time period, CRA will accept it. Picking a number out of the air without reasonable backup will not be accepted.

 

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