Are there tax implications when farm quota is transferred to a child through an estate in Ontario?

Yes — farm quota is treated as property for federal income tax purposes, so the same general rules that apply to other capital property at death generally apply to it too. Under the Income Tax Act, a deceased's property is generally treated as disposed of at its fair market value immediately before death, which can trigger a capital gain reportable on the deceased's final tax return, even though no actual sale took place.

Where the quota is being transferred to a child as part of a farm succession plan, a tax-deferred "rollover" may be available for qualifying farm property, which postpones rather than eliminates the tax that would otherwise arise, but whether quota specifically qualifies depends on how it was used and held. Quota can also fluctuate meaningfully in value depending on the marketing board and market conditions, so getting a current valuation matters both for the tax analysis and for fairness among siblings if other children aren't receiving quota. Because this involves federal tax rules layered on top of Ontario estate administration, and the details are technical, this is squarely a situation for an accountant or tax lawyer to review before the transfer happens, not after.