| What Must Be Done...
The legal representative of
the deceased (usually the executor) is required to:
- File the
final return of the deceased
- Ensure that all the taxes owing are
paid
- File any returns for previous years that have not been
filed
- Cancel the deceased’s Social Insurance Number
Tax Tip: If
the deceased person was paying tax installments, you do not have
to continue paying them after death – provided the necessary
installments were paid up to date.
When This Must Be Done...
The
final tax return and taxes payable are due on or before:
- Date of
Death January 1 to October 31 - April 30 of the
following year
- Date of Death November 1 to December 31
- Six months after the
date of death
What Documents Are Required...
- Certified Copy of the death
certificate
- Certified Copy of the will (or other document that names the
legal representative)
- Certified Copy of the letter of probate List of all
the assets and liabilities of the deceased
- Copy of the last tax
return filed and the notice of assessment
- Documents supporting
all income earned in the year (T3, T4, T4A(P), T4A(OAS) and T5
slips, investment statements, capital gain and rental income
details, etc.)
What Income Is
Taxable On the final (terminal) return, report
all of the income from January 1 to and including the date of
death; taxable income includes:
- All employment, business, investment and property income
earned in the year
- All RRSP's and RRIF's at fair market value (spousal
transfers are generally tax deferred)
- Gains/Losses resulting from
the Deemed Dispositions of
all property owned by the deceased
What Income Is Non-Taxable...
-
Gains on principal
residence (provided there has not been a change in use)
-
Qualifying death benefits up to $10,000 (excluding CPP death
benefits)
Tax Tip: CPP Death Benefits
are not reported on the deceased’s final return. They are
reported either by the recipient or by the deceased’s trust.
What
Expenses Are Not Deductible...
Personal expenses
are not deductible; they include:
On the final return, special rules apply to the following:
-
Medical
expenses
-
Charitable
donations
-
Loss carry
backs
Tax Tip:
If a person dies early in the year and before filing the previous
year’s return, the due date of that return and the balance owing
is extended from April 30th to six months after the date of
death.
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