# Estate Tax - Filing a T3 trust for estate - deadline?



## jla1962 (Nov 15, 2014)

Hi, I am executor of my late father's estate. He died October, 2015. I have filed his 2015 income tax. Probate was not issued Until April 2016. I will have to file a T3 trust for the revenue received into his estate account in 2016 (death benefit, RIF, mutual funds, etc). My question is: I understand I have to file the T3 trust return within 90 days of the anniversary of his death? Is that correct, and if so, I will not have Tax slips by that point to support the tax return. I checked with the bank and they only issue tax slips once a year in February. If I have to file 90 days from mid-October that puts me at a mid-January deadline which is before tax slips will be received. Is this info correct? 

I called CPP regarding the tax slips for his death benefit received in January and they sent it out right away, but the bank only issues at end of February, which will be beyond my deadline.

Thank you!


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## Numbersman61 (Jan 26, 2015)

jla1962 said:


> Hi, I am executor of my late father's estate. He died October, 2015. I have filed his 2015 income tax. Probate was not issued Until April 2016. I will have to file a T3 trust for the revenue received into his estate account in 2016 (death benefit, RIF, mutual funds, etc). My question is: I understand I have to file the T3 trust return within 90 days of the anniversary of his death? Is that correct, and if so, I will not have Tax slips by that point to support the tax return. I checked with the bank and they only issue tax slips once a year in February. If I have to file 90 days from mid-October that puts me at a mid-January deadline which is before tax slips will be received. Is this info correct?
> 
> I called CPP regarding the tax slips for his death benefit received in January and they sent it out right away, but the bank only issues at end of February, which will be beyond my deadline.
> 
> Thank you!


I'm not sure what you included in your father's return but you should consult the following links
http://www.cra-arc.gc.ca/E/pub/tg/t4011/t4011-15e.pdf

http://www.cra-arc.gc.ca/E/pub/tg/t4013/t4013-15e.pdf
All assets are deemed to have been sold at date of death and reported on final tax return (RIF value is 100% taxable)
Your father's estate is a testamentary trust and will have a Dec 31 year-end
My comments are based on the assumption that your father does not have a spouse.


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## AltaRed (Jun 8, 2009)

The testamentary trust started in on the date of death and it is my understanding from the rules that it does not have to have a calendar year end but it is most convenient to do so to match up with tax slips and tax software and income tax forms. See http://www.cra-arc.gc.ca/gncy/bdgt/2014/qa15-eng.html which is also discussed in the Trust Tax Guide. The rules have changed for trusts started in 2016. It may be best if the OP calls CRA and asks for the Estate Department and seek advice on the best way to handle proposed year end for a testamentary trust started in October 2015, but is carrying over into subsequent year(s) where the rules have changed. I don't believe a testamentary trust can cover more than a 12 month period, so the first year end cannot be past October X, 2016. As already mentioned, it would have been more convenient to declare Dec 31, 2015 as the first year end for the trust. I'd encourage you to consider that.

A key driver from my perspective is I belive a trust return is supposed to be filed within 90 days after year end of the trust so if Dec 31, 2015 is the year end for the trust, you are overdue for the first T3 tax return.

With regards to income, since the testamentary trust actually started the day of death, any income earned since date of death in October 2015 has to be included in the trust, not the final T1 return. Example, mutual fund distributions received in December 2015 are part of the trust. Even trickier, if the T3 tax slips received in March also include ROC, that has to be, as a minimum, prorationed back to distributions paid pre-death, and distributions paid post-death.

As suggested by Numbersman61, read the 2 guides. It can be mind numbing. I just went through this with my mother's estate (died April, 2015) and I picked Dec 31, 2015 as the year end for her testamentary trust. Since Probate was obtained summer of 2015, and distributions were made before end of 2015, I only had to deal with one T3 Trust return (closed the trust end of 2015).


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## jla1962 (Nov 15, 2014)

Thank you both for your responses, I will read through the links you kindly provided.

I did values of all assets of date of death, and reported on his tax return for 2015 that led up to his DOD. I didn't think about declaring a December 31st year end and doing two T3s, but I guess that ship has sailed. 

I will be claiming his CPP death benefit of $2500 on the T3 and declaring some capital losses as most of his investments went down in value from his DOD to when the funds were actually received some time after probate was issued in spring 2016.

I have told my son, who is my executor, that I promise to die early in the calendar year.


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## AltaRed (Jun 8, 2009)

Tip if you have not already seen it. If the T3 has a net capital loss on Schedule 1, you can include a letter with your T3 filing request a 164(6) election to carry back that loss to the Final T1 Return...and get a refund. I did that on my mother's T3 and CRA advises me that the request is duly noted and will be assessed shortly for a T1 adjustment.


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