OhGreatGuru wrote:The CPP Death Benefit is unfortunately considered as income received by the estate, which is another reason why you have to file a T3 return. The executor should receive a a T4A(P) in Jan/Feb for this. (A bloody nuisance frankly, as for a deceased person of simple means this may be the only taxable income to the estate. But at least it will be taxed at a low rate that way, and not in the hands of a beneficiary. But it delays final settlement of the estate, because CRA is very slow to deal with estate returns.) One of the executor's final steps should be applying for a Clearance Certificate, which you can't do if there is an outstanding T3 to be filed.
a) For the pittance that is involved in the CPP death benefit, I don't know why they insist on taxing it - talk about taxing your widows and orphans.
b) Considering that its purpose is to facilitate a decent burial, and considering the cost of funeral services these days, I don't understand why they don't simply allow the family to sign it over to the funeral home, and have it bypass the estate.
OhGreatGuru wrote:The CPP Death Benefit is unfortunately considered as income received by the estate, which is another reason why you have to file a T3 return.
DavidR wrote:How much tax would the beneficiary pay if you put the $2500 on his/her return? (CRA has a long standing practice of....)
Then you'd have no T3 to file, and no wind-up date to worry about...
yyzvoyageur wrote:So I'm working through the T3RET form now. So far, so good, but a couple of questions:
2. Do I have to complete schedule 9 (Income Allocations and Designations to Beneficiaries) and/or do I have to complete a T3 tax slip to show where the $2500 ended up? I'm a bit confused on this point. As far as CRA would be concerned, there is now $2500 (minus $501.25 in taxes) in this trust. I've indicated a trust wind-up date of 2012-12-31, but do I have to somehow show what happened to this money after the trust ended?
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