All About Estates

Category: Tax Issues

Total 234 Posts

Inheritance and Tax

There is renewed discussion on whether Canada will become another jurisdiction where specific gift or estate taxes will be imposed on inheritances. There is speculation that the discussion will lead to something concrete as early as next week’s Federal Budget. In the meantime, there are situations where inheritances can come…

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Tax returns for deceased persons

The Canada Revenue Agency (CRA) will occasionally post requests to help improve the Agency’s processing efficiency. Recent posts caught my attention given their application to returns for deceased individuals. Date of Death The CRA noticed that tax preparers occasionally include a deceased person’s date of death on the living spouse’s…

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Death, taxes and cryptocurrency

Everyone knows that you can’t avoid the tax collector, and death is no exception.  Under the Canadian Income Tax Act, on the death of an individual subsection 70(5) will trigger a deemed disposition of all the deceased taxpayer’s capital property at fair market value thus taxing any accrued capital gains…

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Death Benefit Payments

The Canada Revenue Agency (CRA) recently released a translated technical interpretation with helpful guidance on the tax treatment of a death benefit payment in certain specific situations. A death benefit is income of either the estate or the beneficiary who receives it. Up to $10,000 of the total of all…

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Professional fees incurred in the context of a litigation with CRA

On occasion, the personal representative of an estate may have to incur costs to either settle or disclose a matter with the Canada Revenue Agency (CRA). In a translated technical interpretation, the CRA provided some of its own guidance on how to navigate the relevant rule in the Income Tax…

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Taxable preferred shares and estates – say what?

The tax reform of 1987 introduced the term “taxable preferred shares”[1] to curtail the tax advantage for non-taxpaying corporations using preferred share financing over debt financing. The result of this reform subjected the non-taxpaying corporation to a (current) 25 per cent tax on dividends that were paid on taxable preferred…

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TFSA’s and Non Resident Penalties – An Update

A couple years ago, one of my blog colleagues wrote on the residency rules regarding tax free saving accounts (TFSA’s). Generally, as an owner of TFSA, if you leave Canada, the accumulated funds may remain in the TFSA without Canadian tax consequences. You can’t make any further contributions but you…

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Valuing Estate Assets – A Hierarchy of Evidence

Acting as an estate trustee can be a difficult job. It is often made more difficult when you have to work with a sibling. While the types of disputes co-estate trustees can have with one another are seemingly infinite, one common fight is over valuing an estate asset. Valuing estate…

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Use of Cottage By Children of Settlor of an Alter Ego/Joint Partner Trust

Both alter ego and joint partner trusts (the trust) allow a settlor to transfer capital assets into the trust on a tax-deferred basis if the following conditions are met: The trust is created after 1999. The settlor is at least 65 at the time of creation. In the case of…

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FAMILY TRUSTS AND DISTRIBUTIONS OF CAPITAL GAINS

Capital gain splitting on the sale of business interests, owned by family trusts with several beneficiaries, continues to be a valuable tool for tax planning purposes, including the opportunity under certain circumstances to access the super capital gains exemption more than once in such a transaction. However, the beneficiaries of…

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