Estate Tax

Have you been named the executor of an estate?

The individuals named as the Executors of an Estate often find themselves responsible for tax filings to which they are totally unfamiliar. Being unfamiliar with the requirements, available options, deductions and elections, can often lead to the estate paying unnecessarily high amounts of tax, or incurring penalties and interest charges for not complying with requirements.

Each estate is unique and many factors must be considered in preparing the returns for the deceased and the estate.

  1. Are there losses carried forward from previous years that could be applied against income in the final year?
  2. Did the estate incur capital losses during the first year that could be carried back to the final T1 return of the deceased individual?
  3. Did the individual file a 1994 capital gains election on any of the assets still held at the date of death?
  4. Are any of the estate assets being dispersed to beneficiaries in a non-cash form?
  5. In transferring assets to a surviving spouse is it beneficial to elect to transfer some or all of the assets at market value?
  6. How should the investment income reported on T-slips received for the year of death be reported on the various tax returns?
  7. Did the estate receive any death benefits from any source?
  8. Did the deceased person have any income that could be reported on an optional "Rights or Things" return? Is there any benefit to filing an optional return?
  9. Did the value of registered funds decrease between the time of death and the time of redemption by the estate?
  10. Are there any medical or disability deductions available to the deceased individual for the final return?
  11. Did the will of the deceased person provide for any charitable donations?
  12. Are any of the beneficiaries of the estate minors?
  13. Are any of the beneficiaries of the estate disabled?
  14. Are any of the beneficiaries of the estate non-residents of Canada?
  15. What date should be chosen as the year end date for the estate? Once chosen, what are the filing deadlines for the estate returns?
  16. Will the estate be wound up within a short period of time, or will it be in existence for several years?
  17. When and how should clearance certificates be applied for on behalf of the deceased individual and the estate?
  18. Does the estate need to issue T4A slips to trustees? When and how are they filed?
  19. Does the estate need to issue T3 slips to allocate income to beneficiaries? When and how are they filed?

At Ritchie Shortt & Tully LLP, we can assist you in performing your duties as Executor responsibly and with the best interest of the beneficiaries in mind.