All About Estates

Tag: Trusts

Total 22 Posts

Making Effective Distributions of Estate Taxable Income Tax

Dealing with the taxation of income earned by an estate can be complex. It has become even more complex since January 1, 2016.  It was on this date that all estates, other than those that qualify as a “graduated rate estate” (GRE), were no longer able to benefit from graduated…

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QUALIFIED DISABILITY TRUST (“QDT”): HOW TO FILE A JOINT ELECTION?

Recently, the Canada Revenue Agency (“CRA”) issued a “how to file” the joint election for a trust to be a QDT: http://www.cra-arc.gc.ca/E/pbg/tf/t3qdt/README.html From 2016 forward, this form is to be used if one or more beneficiaries are jointly electing that the trust be designated to be QDT for the year….

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Unrealized Capital Gains: Take Action Now?

As we head toward another federal budget to be released on March 22, there is much speculation about a change in the capital gain inclusion rate from 50% to 66.67% or 75%. Current Capital Gain Tax As the rules are currently written, only 50% of a capital gain is subject…

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The 21-Year Deemed Disposition Rule

Generally speaking, a personal trust is deemed to have disposed of its entire capital property and land inventory on the 21st anniversary of the creation of the trust and every 21 years thereafter for proceeds equal to its fair market value and to have required the same property immediately thereafter…

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Multiple testamentary trusts for tax purposes: Are they always treated as one?

This issue was recently tested in Court with a “bittersweet” result. Three testamentary trusts were created for 3 children in the late 2000’s. Their mother was an income beneficiary in each trust, and entitled to receive all the net income derived from each trust during her lifetime. A child and…

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Taxable Income of an Estate: Can it be Distributed?

Suppose a straightforward will with very simple instructions to the executor: The executor is to pay the debts and expenses of the deceased, execute certain specific bequests of property and with some general instructions, distribute the residue of the estate to the named beneficiaries. During the administration of an estate,…

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TAX FREE ROLLOVERS: DIVORCE AND DEATH – NOT A GOOD MIX

Recently, the Canada Revenue Agency (“CRA”) was asked to comment on a scenario involving the transfer of a RRSP and a capital asset between ex-spouses, and one the spouses dies before the rollover can be effected: Do the tax free rollover provisions found in the Income Tax Act (“ITA”) still…

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Trust distribution of Property

The Canada Revenue Agency (CRA) was asked if a distribution of certain property to beneficiaries is a taxable event, when an attribution rule (triggered by a beneficiary who contributed the property to the trust) ceases to exist?

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CAPITAL DIVIDEND ACCOUNT ELECTIONS AND THE DATE GONE WRONG?

As I mentioned in a previous blog, the capital dividend account (“CDA”) is often a central feature of tax planning for individuals with private corporations with the opportunity to make tax-free distributions to shareholders on the disposition of certain capital assets. It gains particular focus in estate planning scenarios and…

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TRUST INSTALLMENT REQUIREMENTS, INTEREST AND PENALTIES

One of the many tasks associated with the administration of trusts is making sure all tax payments are made on a timely basis to protect the trust and its beneficiaries from avoid interest and penalties. In this regard, most trusts are required to make installment payments. Prior to 2016 only…

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