Deceased Taxpayers – Checklist of Requirements for Tax Return Preparation

February 2013

Here is a list of requirements when preparing a tax return for a deceased person. For more information about filing a tax return for someone who has passed away, see CRA publication T4011 Preparing Tax Returns for Deceased Persons

Full name, last address and social insurance number (SIN) of the deceased
Name and address of executor or administrator (and contact person for additional information, if different); where is the deceased’s information now being mailed, if different from the executor/administrator
Date of birth and date of death
Details of spouse and/or dependents
Copy of Last Will and Testament and death certificate
A copy of the prior year’s tax return (3 years, with assessment notices, if available). If a 1994 capital gains election was made on property owned at death, a copy of the election or the 1994 tax return is required.
Inventory of assets at date of death (at fair market value); probate documents will normally suffice, except that full market value of real estate will be needed, not just the tax assessed value. See my sample Estate Inventory Listing.
Copy of tax slip, or the amount of, CPP death benefit; if no estate T3 return (see below) will be prepared, then provide the name of person who received the benefit and will pay tax on it. The CPP death benefit must be reported on a separate T3 return or by a beneficiary of the deceased.
Details of income received up to date of death, including wages and deductions, Canada Pension, Old Age Security, other pensions, RRSP or RRIF amounts, Canada Savings Bond interest, bank account interest, and other amounts (including rentals and businesses). Where tax slips are not yet available, details of the incomes earned year to date are required, including the amount of tax withheld
For T3 estate returns, details of income earned after date of death are required. Also, a list of any property distributions from the estate, with the date, name, address and social insurance number (SIN) of the beneficiary is required
Tax instalments made for the current year
Details of RRSP balances (tax slips from the RRSP Trustee, or letters confirming the balances at date of death), and names, addresses and SINs of beneficiaries (including ages, if under 18)
Original costs of assets acquired after 1971, or December 31, 1971 values of assets acquired earlier. This is not required for the principal residence, including 1 acre of land, unless not wholly used as a principal residence. There is a place on my sample Estate Inventory Listing for these details.
Rental property income and expenses to date of death
If information is required from the Canada Revenue Agency, we will require an authorization form (T1013) signed by the executor(s)/administrator(s)

Filing Due Dates

Final personal tax return(s) of the deceased (T1)– the later of April 30 of the following year (i.e. the normal filing date) or six months after date of death (i.e. if date of death is in November or December). The due date for the surviving spouse is the same as for the deceased taxpayer, although any balance owing by that spouse will incur interest costs if paid later than April 30.

Estate tax returns (T3) – three months after the selected year-end of the estate, which may be up to one year after the date of death. A T3 return is to report income earned by the deceased’s estate after death. This income will typically include interest, dividends and capital gains earned on investments and other assets held during the time it takes to wind up the estate, as well as the Canada Pension Plan death benefit. Income and capital gains earned up to the date of death are generally included in the final T1.

When is a T3 estate return required for a deceased person?

A T3 estate tax return is required where the estate (also called a trust):

has tax payable;
has disposed of, or has deemed to have disposed of, capital property or has a taxable capital gain;
has provided a benefit of more than $100 to a beneficiary for upkeep, maintenance, or taxes for property maintained for the beneficiaries’ use;
has any income, gain or profit that is allocated to beneficiaries, and the trust has total income from all sources of more than $500, or income of more than $100 allocated to any single beneficiary, or has allocated any income to a non-resident beneficiary. A return may not need to be filed if the estate is distributed immediately after the person dies, or if the estate did not earn income before the distribution.

Income earned by the estate may be taxed in the estate (on the T3) or allocated to the beneficiaries. A decision will be required by the executor(s)/administrator(s) in this regard.

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Blair Corkum, CPA, CA, R.F.P., CFP, CFDS, CLU, CHS holds his Chartered Professional Accountant, Chartered Accountant, Registered Financial Planner, Chartered Financial Divorce Specialist as well as several other financial planning related designations. Blair offers hourly based fee-only personal financial planning, holds no investment or insurance licenses, and receives no commissions or referral fees. This publication should not be construed as legal or investment advice. It is neither a definitive analysis of the law nor a substitute for professional advice which you should obtain before acting on information in this article. Information may change as a result of legislation or regulations issued after this article was written.©Blair Corkum