As a general rule there are three topics of conversation that most people like to stay away from. These are death, taxes and religion. While religion can certainly be left up to the individual unfortunately death and taxes are two issues that will have an impact on others besides an individual. There comes a time when everyone who passes on leaves a responsibility of filing the final taxes. However, for Canadians technically there is nothing formally known as estate taxes but a close proximity to it is the disposition of any capital property that happened to be owned at the time an individual passed away. The value of this property is determined by what the fair market value of the property is at the time the person became deceased. This value will determine if there will be gain or loss that has to be calculated in when the income tax is being prepared.
If you are a Toronto or surrounding area resident that finds themselves in a situation of having to prepare the final tax return for a deceased individual, it may be worth your while to utilize the services of a Toronto tax accountant. It doesn’t matter whether you are the beneficiary or taking on the responsibility of performing this task for the estate, it is very important that it be done right.
Often when an individual thinks about property they are simply thinking about real estate while in this case it can have many different meanings. Within these tax obligations you may find that there is a registered retirement savings plan that has to be dealt with, or perhaps a registered retirement income fund. These may very well be fully taxable, but not if they were left to the spouse of the person who passed away or to a minor child who was their dependant.
The Canadian tax laws in their complexity make it difficult for the average person to determine what is taxable and what isn’t when it comes to the estate. There are exemptions in place but you really have to have a good understanding of these in order to take advantage of them.
It is often a common practice for tax payers to get confused with tax terms that are applicable to the USA versus those that are subjected to
Canada taxes. For example estate taxes is a common term that many think is applicable to Canada and so is Inheritance tax, however neither of these are found in the Canadian taxation laws. While there are no specific gift and endowment taxes either, there are laws that pertain when property is given as a gift to a person, charity or a trust. Again there are rules pertaining to this as well.
While these are just a few of the possible circumstances that can arise regarding tax filing for a deceased individual there are many others. Often the person responsible for the task of this particular tax return is someone that has been very close to the deceased and are under a lot of stress and bereavement. Putting this unfortunate responsibility into the hands of a reliable
Toronto tax accountant will help to relieve some of the stress and unpleasantness.
