Principal Issues: Whether the $500,000 capital gains exemption would be available to a beneficiary of the estate of a deceased taxpayer in respect of the disposition of property held by the estate which was farmed by the deceased taxpayer where: 1) the beneficiary, "the widow", inherited part of her interest in the estate from her husband, who was a son of the deceased taxpayer and 2) another part of her interest in the estate is her interest in her brother-in-law's estate, which was first inherited by her husband, and then inherited by the widow after her husband's death.
Position: Yes to both questions.
Reasons: The property constituted "qualified farm property" of the estate under the requirements of subsection 110.6(1) and a designation was made in respect of the property so that the beneficiary referred to in paragraph 104(21.2)(b)(i) of the Act could qualify for the $500,000 capital gains exemption upon disposition of the property by the estate. The widow meets all of the requirements of section 110.6 in order to claim a capital gains deduction in respect of qualified farm property because the property was farmed by the deceased taxpayer, who was the father of her deceased husband, is considered to be a parent of hers by virtue of subparagraph 252(2)(a)(iii).