26 November 1990 Internal T.I. 902477 F - Filing Requirements on Death

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

November 26, 1990

19(1)

This is in reply to you letter of August 25, 1990 in which you requested information concerning the filing requirements and tax consequences resulting from the death of an individual.

Generally, information regarding the questions you raised in your letter can be found in the Deceased Persons Tax Guide and the T3 Guide and Trust Return which we have enclosed for your convenience. With respect to your specific questions we have made some additional comments below.

1.     (a)  A T1 General income tax return must be filed for the year in which a taxpayer died; i.e., for the period from January 1 of the year of death to the date of death. Information concerning the time limits for the filing of the deceased's final return as well as comments concerning the filing of certain separate returns are set out on page 4 of the Deceased Persons Tax Guide.

     (b)  The circumstances under which a T3 Trust income tax return must be filed are set out on page 2 of the T3 Guide, under the heading "Filing Requirements". This return is required to be filed within 90 days of the end of the trust's taxation year. Comments concerning the taxation year of a trust can be found on page 6.

2.     Item 1 on page 2 of the T3 Guide sets out the circumstances under which a T3 return must be filed. It may not be necessary to file a T3 return there an estate is distributed immediately after death or where no income has been earned by the estate before its distribution. If you require further clarification after reviewing this guide, you should contact your local District Taxation Office in St. Catherines.

3.     Copies of the T3 trust return are included as part of the T3 Guide and Trust Return publication. We have also enclosed a 1989 T1 General income tax return for Ontario although, as noted on pace 4 of the Deceased Persons Tax Guide under the heading "Filing of Returns", you may wish to wait until a 1990 T1 General income tax return becomes available.

4.     The tax treatment of assets held at the time of death is outlined in Part III of the Deceased Persons Tax Guide. The disposition of such assets are taken into account in preparing the required returns for the deceased taxpayer but there are certain exceptions. An example of such an exception occurs where "rights or things" are transferred into the hands of beneficiaries prior to the deadline for filing the separate "rights or things" return. See Part II of the Deceased Persons Tax Guide for further details. Assets transferred to and held by the estate may generate income subject to tax in its hands for the period the property is held by the estate. As well assets held by the estate and subsequently disposed of may result in capital gains or losses to be taken into account in computing its income.

          Also please note that to the extent interest income has been included in the deceased taxpayer's income (see page 5 of the Deceased Persons Tax Guide), it is not required to be included in the income of the estate.

When you review the enclosed Guides in light of your own circumstances you may come across references to other sources of information, such as interpretation bulletins. If you require copies of these sources or if you have any further specific questions please contact Ms. Marie Balthazar in the Estates and Trusts Section of the St. Catherines District Tax Office (Tel. 984-2201).

We trust that our comments and the enclosures will be of assistance to you.

Yours truly,

for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

Enclosures