20 May 1997 External T.I. 9711045 - DEATH BENIFIT CPP

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:

Can death Benefit from CPP\QPP be reported by recipient or must it be reported by estate?

Position:

Option to be reported by either recipient or estate.

Reasons:

See T1 guide line 114 and T3 guide Appendix B par 2(g).

971104
XXXXXXXXXX S.Tevlin

Attention: XXXXXXXXXX

May 20, 1997

Dear Sirs:

Re: Reporting of Canada Pension Plan ("CPP") Death Benefits

We are writing in response to your letter dated April 16, 1997 wherein you asked for our opinion as to the proper reporting of "CPP Death Benefits". In particular you asked that we confirm that Revenue Canada's commentary to Line 114 of the 1996 T1 Guide is correct. In this regard we offer the following comments.

As noted in the commentary to Line 19 (Other Income) in the T3 Guide, "any death benefits under the Canada Pension Plan or Quebec Pension Plan are to be included as other income on the T3 return for the deceased".

Although the commentary to the T3 Guide does not directly provide the option described in the T1 Guide, paragraph 2(g) of Appendix B to the T3 Guide states that, CPP/QPP Death Benefits (if not reported by the recipient) are to be reported on the estate's T3 return.

It is therefore our opinion that the comments made in the 1996 T1 Guide are correct and therefore the CPP Death Benefit can be reported by either the estate of the deceased or the recipient of the payment.

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch