By “bumped-up” I mean the following. When a person passes away there is a deemed disposition of the deceased persons capital property at the fair market value ("FMV") of the property right before the person's death (this is typically the last spouse or common-law partner to die, as the income tax allows a tax-free transfer of property to a surviving spouse or common-law partner).
For example; say your mother passed away in 2015 and she owned 1,000 shares of Royal Bank (ignoring stock splits) that were worth $80 a share at her passing, that had been purchased for $12,000 in 2001. (Note: The Royal Bank shares could have been transferred to your mother as a tax-free spousal transfer from your father on his passing or the shares could have been purchased directly by your mother, it is the same tax result).
While I use parents in the above example, the same result occurs if you inherited the capital property from a relative or friend etc.
A totally separate but interrelated ACB tax issue, is the 1994 Capital Gains Election. In 1994, the $100,000 capital gains exemption was phased out. However, individuals were eligible to make an election on their 1994 personal tax return to bump the value of their capital properties by up to $100,000. Where you inherit capital property, if possible, before the accountant files the terminal return of the deceased, you should ask them if they have the 1994 election on file, or if not, see if you can find the deceased's 1994 return to determine if an election was made in 1994. If the election was made, it will likely have no impact on your inherited ACB, but it may reduce the tax on the terminal tax return of your parent or relative etc.
The key documents you hopefully already have on hand or can dig up from a box in storage are:
An interesting capital asset is the principal residence (“PR”) of your parents or anyone else you inherited property from. If the house was inherited and not sold immediately (say you kept the PR as a rental property), then the FMV of the PR on the death of your parent becomes important. However, prior to 2016, when the sale of a PR had to start being reported on Schedule 3 (and from 2017 onwards when it had to be reported on Schedule T2091) administratively the CRA did not require you to report the sale of your PR if it had always been your PE and the sale was exempt from tax as your PR.