18 January 1996 External T.I. 9530655 - ALIMONY PAID BY THE ESTATE AFTER 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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

alimony payments required to be made by estate after death of payer

Position:

not deductible to estate or deceased nor included in income of recipient

Reasons:

estate is not a natural person and has neither a spouse nor a child so that all the conditions in 56(1)(b) and (c) could not be met in any case

		953065
XXXXXXXXXX	A. Humenuk

January 18, 1996

Dear Sir:

Re: Alimony and Maintenance

Your letter of November 15, 1995 addressed to Lois Sellers of the Toronto East Tax Service office has been referred to us for reply.

You have asked whether alimony or maintenance paid to an individual by the estate of a spouse or former spouse would be taxable to the recipient under paragraph 56(1)(b) of the Income Tax Act (the Act). For the purpose of your question, it can be assumed that the payments in question were deductible to the payer prior to the payer's death under paragraph 60(b) of the Act and were required to be included in the recipient's income throughout that same period of time.

Maintenance and support payments are required to be included in the income of the recipient where the conditions of either paragraph 56(1)(b) or (c) as modified by section 56.1 of the Act are met. Such payments will generally only be deductible to the payer where the payments are required to be included in the recipient's income.

Among other conditions, paragraphs 56(1)(b) and 60(b) of the Act only apply with respect to payments made from one spouse to another. similarly, paragraphs 56(1)(c) and 60(c) of the Act only apply where the payer is the natural parent of the child of the recipient. Although the Act deems an estate to be an individual and taxes it on that basis, it is nevertheless not a natural person and cannot have a spouse or former spouse from whom it is living separate and apart nor could it be considered to be the natural parent of a child. Thus, while a court order may require an estate to continue making payments after the death of the payer, it is our view that neither paragraph 56(1)(b), (c), 60(b) or (c) of the Act would apply with respect to a payment from the estate to the surviving spouse or former spouse. As alimony and maintenance payments are only deductible in the year paid, such payments would also not be deductible in computing the deceased taxpayer's income for the year of death as such payments would not have been made within the relevant taxation year.

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

c.c. Lois Sellers, Client Assistance,
Toronto East Tax Services