"Similarly, if you received specified foreign property as a gift, or inheritance, the cost amount is its fair market value at the time of the gift or inheritance"

Question: If I am the beneficiary of a foreign non qualified annuity and I opt to leave the annuity in place for a few years (five year rule) and take out a distribution here and there.....

What is the timing of this gift? would I be in receipt, time of death, time of reporting death to insurance company, time of receipt of distributions?

Would the full amount of the annuity be a part of my calculation of ACB for currency gains/losses or just the distribution?

  • Just to be clear, were you granted this annuity as a bequest in someone's will? Your question implies this but doesn't actually say it. – Paul Johnson Jan 11 at 11:26
  • Yes, beneficiary of death benefit from annuity. Deferred payments. Money is staying in the usa when taken from annuity .. goes into bank account. – Wendy Jan 22 at 5:01
  • Yes, beneficry of death benefit from annuity. Deferred paymts. Money is staying in the usa when taken from annuity .. goes into bank account. Getting mixed info ... cra now says cash in the bank is not subject to gains on currency transacts, day to day expense.. Also getting mixed messgs as to whther I pay taxes on this non qualified annuity. I have to in the USA on the interest since inception ... originally told by CRA only need to report the interest since receipt I just called and they now say ALL interest to be reported, not just since inherited. What I report in USA I report in CDA. – Wendy Jan 22 at 5:11
  • I think you need to talk to a tax lawyer. – Paul Johnson Jan 22 at 15:41

That would be the moment you came into the possession of the item. Specific to the clause, it's looking for the fair market value of the item (if it's not a specific dollar sum) when you received it (once upon a time, during the Ming Dynasty, you could get Ming Vases for a lot cheaper than you can today, since that Dynasty ended in 1644 and by default any Made in China Vase you can buy today isn't going to be a Ming Dynasty vase).

Basically put, when the item was given to you for free, how much would you have had to pay for an identical item at the same time?

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