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Hi cab2,

Your sister would be taxed on her investments based on her province of residency until her death.  All amounts to the date of death would be reported on her personal tax return.  Upon her death she is deemed to have sold all of her investments, so a capital gain/loss would most likely be triggered on her final personal tax return as well.

If the investments automatically were transferred to your name upon her death, then your adjusted cost base for the investments would be the fair market value of the investments on the date your sister passed away.  You would then report the amounts after death on your personal tax return.

It is a little bit more complicated if the investments were not automatically transferred to your account upon death as the investments would then be considered part of your sisters estate and the estate would report and pay taxes on the investments until they were distributed to you.

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