Mr. Harrison dies, leaving his entire estate to his wife, Eleanor. His estate includes an RRSP valued at $400,000, with Eleanor named as the sole beneficiary, and non-registered investments with an accrued capital gain of $150,000. How does the spousal rollover apply to these assets?

Question: Mr. Harrison dies, leaving his entire estate to his wife, Eleanor. His estate includes an RRSP valued at $400,000, with Eleanor named as the sole beneficiary, and non-registered investments with an accrued capital gain of $150,000. How does the spousal rollover apply to these assets?

Answer options: ✅ Both the RRSP and the non-registered investments are eligible for a spousal rollover, deferring immediate tax.

• Only the RRSP is eligible for a spousal rollover; the non-registered investments trigger immediate capital gains.
• Only the non-registered investments are eligible for a spousal rollover; the RRSP distribution is fully taxable to Eleanor.
• Neither asset qualifies for a spousal rollover; both trigger immediate tax consequences upon Mr. Harrison's death.

Correct answer: Both the RRSP and the non-registered investments are eligible for a spousal rollover, deferring immediate tax.

Explanation: Both registered assets (like RRSPs with a named spouse beneficiary) and non-registered capital property (if transferred to a spouse as a result of death) are eligible for spousal rollover provisions under the Income Tax Act, deferring immediate tax consequences until the surviving spouse disposes of the asset or passes away.