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APPENDIX A

Checklist Of Filing And Planning Requirements

  1. File final return for the period from January 1 of the year of death up to the date of death including all income accruing up to that time. The final return is to be filed by the later of April 30 of the year following the year of death, or 6 months following the date of death. If the Will creates a spouse trust the return must be filed within 18 months of the date of death.
  2. File a separate return for rights or things, as necessary. Election to be made by the later of 1 year from the date of death or 90 days after the notice of assessment of the final return is mailed by Revenue Canada.
  3. File a separate return for the fiscal period of a proprietorship or partnership whose fiscal year ended prior to the date of death, as applicable. Separate return must be filed by the later of 6 months after death and April 30 of the year following death.
  4. File a separate return for income from a testamentary trust for which the deceased was a beneficiary, as applicable. Separate return must be filed by the later of 6 months after death and April 30 of the year following death.
  5. File returns for years prior to the year of death where those returns have not been filed by the deceased during his lifetime.
  6. File election and post security for payments of tax on an installment basis where appropriate.
  7. Review each capital property of the deceased to determine whether some or all assets passing to the spouse should be transferred at fair market value in order to utilize capital losses (or super capital gains exemption, if available) of the deceased. Also consider electing to pass depreciable property to spouse at fair market value to trigger capital gains to deceased to utilize terminal losses.
  8. Consider triggering exempt capital gains to deceased farmer on transfer of farm property to a child.
  9. If the terminal losses and allowable capital losses realized in the first taxation year of the estate are sufficiently large, file an election to have those losses applied against income reported on the final return of the deceased to reduce the tax payable on that return. The resulting refund is then applied to the tax liability of the estate or if the trust is not liable for taxes, the amount will be refunded to the estate.
  10. File a T3 trust return for each fiscal period of the estate. The T3 return must be filed within 90 days of the end of the taxation year of the trust. T3 Supplementary slips must be issued to each beneficiary to whom income of the estate is paid or payable in the taxation year of the trust.
  11. Ensure that the preferred beneficiary election is filed no later than 90 days following the end of the taxation year of the trust.
  12. Prior to the wind up of the estate and the distribution of its assets to the beneficiaries, obtain a clearance certificate from Revenue Canada certifying that all taxes, interest and penalties of the deceased and his estate have been paid or that adequate security has been given to Revenue Canada in respect of any unpaid tax or other amounts. If this certificate is not obtained, the personal representative will remain personally liable to Revenue Canada for any tax which remains outstanding to the extent of the value of the assets of the estate. The estate may be distributed prior to receiving the certificate but the personal representative should withhold an amount to cover any additional tax which might be owing up to the time of issuance of the certificate.