| nycefarm, You probably need to talk to the executor of the estate, for likely the estate had to account for the capital gain on the increased value of the asset between the time of purchase and the time of death. Quite likely your basis will be that declared value at the time of death (possibly the date of transfer to you, but I doubt it) - you just have to get certification of the appropriate valuation. It would have been considerate of those in charge of the estate to have provided that information at the time of transfer - they should have known that you'd need it, eventually. In Canada, if you are a spouse, usually you can elect to have the transfer take place at the original price, and use that amount as your basis on subsequent sale (or death).
______________________ I prepared this information a couple of days ago before I learned of the estate situation and have done some revising in the meantime. It may not be very relevant now, but may be useful, so I'll include it. Unless you're talking of a guaranteed investment certificate, CD or bond, forget the term "principal". A dollar, is a dollar, is a dollar. Some are originally invested amount, some are interest earnings, some are dividends, some are capital gain (probably 2 kinds). When an investor (you) bought some mutual fund investment(s), say 10 years ago in an unregistered account, enter that amount in your permanent record. Some managers make payouts over the years, in many cases those amounts are not paid to the investor (you) in cash but reinvested at that time, and you report them as income and pay tax on them at that time. Possibly at varying rates, depending on whether they were declared as income, interest, dividend or capital gain at that time - but you paid tax on them, at the time that they were declared (whether reinvested or taken in cash). Some of the investments which the managers made produced interest, some produced dividends, and sometimes they sold some stocks, bond, etc. for more than they'd paid, to produce capital gain. The managers usually pay their expenses and management expense ratio from the most highly taxed portion of those different kinds of income. At the end of each year some managers send you a report showing your portion of such interest, dividend and capital gain (or other) income received during that year, with a cheque if you are taking the annual income in cash. You report that income for income tax purposes, whether received in cash or reinvested. If those annual payouts were reinvested then you need to keep track of all of them in your permanent record, as they are amounts that you invested, in addition to the cash amount that you invested originally. If you originally invested $10,000. and the amounts that were declared as payouts but not paid out in cash but reinvested over the years and tax paid on them at those times was $4,000. and you sell them for $20,000., your total amount invested was not $10,000. but $14,000. and your capital gain would be $6,000. When various new amounts of cash were invested over a number of years, as is common with purchase of mutual funds, you need to record those newly invested amounts in your permanent record. But then, after a number of years of accumulation, a number of owners choose to have various amounts withdrawn. They must report the amounts withdrawn to the income tax people on an annual basis, with capital gain being calculated and tax paid at that time. You know how many units were cashed, and what the adjusted cost basis was per unit, and what the value was on the date of sale. Record those amounts in your permanent record. During those years with amounts withdrawn occasionally, there usually are varying amounts being declared as payouts but reinvested more or less annually, and tax paid on them at those times, so the issues get quite complicated. It is essential that people keep accurate records of all of those actions as they take place. And I suspect that few do. ole joyful | 
