Tax for estates & trusts – J. Tartaglio, CPA

Learn about the basics of what an are.

If you are reading this as a result of the recent passing of a loved one, let us express our sincerest condolences to you. We can take some of the burden off your family by answering your questions and handling the financial paperwork during this difficult time so that you can focus on the more meaningful issues at hand. There are two things we can be certain of during our lifetimes: Death and taxes. Depending on the particular situation of the deceased, there may be taxes owing from the period prior to death, taxes arising as a direct result of death, and for a time period after death. Offered services include the following:

Representation in communication with Canada Revenue Agency (CRA)

Examination of prior years’ filed T1 income tax returns, making adjustments where necessary

Determination of capital gains and losses on deemed disposition of assets at death

Preparation of unfiled T1 return(s) for period(s) prior to death

Preparation of specialty tax returns, for example T1 Rights or Things

Registration of trust account number

Preparation of trust T3 tax returns – from date of death to final distribution

Preparation of T3 and T5 slips and summaries for Canadian beneficiaries where necessary

Preparation of T4 slips and summary for executor fees where necessary

Application for tax clearance certificate(s)

For information on accounting and estates and trusts, please click here.

An estate is the collection of all property and assets owned by a person, often at death, which are set to be distributed according to a legal document, typically the person’s will. A testamentary trust is formed when these property and assets are transferred to a third party (trustee) for the purpose of distributing them to the beneficiary(ies). For example: An investor passes away, leaving a portfolio of stocks and bonds behind. The trust is formed upon his death, and title to the portfolio is transferred to the trustee who will administer the portfolio for the benefit of the deceased’s children. A common question that arises is who gets taxed on the investment income earned after death – the deceased, the trust, the trustee, or the beneficiary(ies). Sometimes there is no estate when a person passes away, and sometimes there is no trust. These things can get tricky sometimes. There are also many types of inter-vivos trusts which are established during one’s lifetime.