Dealing With Estates In Your Income Tax

If you have a fairly straightforward income tax even though you may still consider this as a hassle to have to do your yearly returns, be thankful that it is no more complicated than that. If you have been placed in the position where you are an executor of an estate then you can be well assured that you are being faced with a lot of responsibilities.   In fact, if you get the chance to decline taking on this responsibility you may want to consider that. However, most people that become executors may not be aware that they were named as the as an executor in the estate and it comes as a surprise to them.

In this position you have the legal duty to make sure that the taxes are done for the individual who has died and their estate. This is where things can get really complex for you and probably your best alternative would be to seek out a qualified and professional accountant that is well experienced in  estate returns.

What you may not realize is that that because this responsibility has been placed on you then you are now personally liable as the executor according to the income tax act. You have to be aware that the T3 return has to be filed and this will depend on the date of death of the individual that it is being filed for.

You really need to look carefully at what the criteria for the filing deadlines are in this case. Ideally what you want to do as the executor is get to the filing in as quickly as possible rather than waiting for the deadline. This will be one less responsibility and a big one off your plate that you are have to deal with.

You may be advised to get a clearance certificate from the Canadian Revenue Agency and this again is something that you will want to discuss with your accountant to see if it is required and if so how to go about getting this.

It may be that while you were going to the process of this tax filing that you discover errors that have been made in previous returns you now have the responsibility of bringing this to the attention of the CRA and you can do so through the voluntary disclosure program.

If the deceased has left charitable donations these are going to have to be dealt with and again this is something that the accountant can advise you on as to how these have to be accounted for. There may or may not be tax liabilities concerning these but you need to be well aware of them.

As you can see the estate taxes can be quite complex and you really have to be on your toes or at least get the proper advice to make sure that you follow through with your executor responsibility effectively.


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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant


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