The Vancouver tax advisors at Mew + Company provide comprehensive list of steps for when a taxpaying family memeber dies
Vancouver, BC -- (ReleaseWire) -- 09/21/2018 --The tax planning advisors at Mew + Company in Vancouver know that a death in the family is a terrible event, but nonetheless final tax matters must be dealt with—either by April 30th or six months after the date of death.
For more, go to: https://www.mewco.ca/blog/death-of-a-taxpayer-a-to-do-list/
Upon the death of a taxpayer, at a minimum, there is a final return ("terminal return") to be filed with the CRA and three optional returns to be filed if desired. In addition, a trust return to report income received after death is often required if the deceased taxpayer owned capital assets at the time of death. The time provided by the Income Tax Act to meet the filing deadline is very tight, especially if the deceased taxpayer had substantial capital assets other than the principal residence and cash in a bank account.
Before addressing the compliance requirements and tax planning options available to the surviving family members, a list of important steps to be taken should be first addressed.
The legal representative of the deceased ("the executor") should forward CRA the death certificate, the will of the deceased, and an updated signed T1013 to give professional advisors authorization to deal with CRA directly. This should be done as soon as possible to avoid delays in obtaining important information such as capital losses carried forward, undeducted donations from prior years, and capital gains exemption already claimed in the past. CRA has very important prior year tax information in its database for tax planning on the terminal return.
It will be the executor who is responsible for all matters, such as the probate, CRA compliance filings and obtaining the clearance certificate from the CRA. The accountant often works very closely with the executor on matters pertaining to the CRA to minimize late filing penalties. Even as the probate process continues, the executor and the accountant could collaborate to obtain adjusted cost-based information to start determining the gains and losses accrued on assets.
One of the most important dates in tax planning for a deceased person is the first anniversary from the date of death. Capital assets and RRSPs which have decreased in value since the date of death must be sold within this anniversary in order to utilize the decrease in value as a tax write off. If the actual disposition happens after the anniversary, the decrease in value is not available for tax use.
A tax return filed for a deceased family member is called a terminal return and offers opportunities to make elections which are available one last time, such as electing to trigger capital gains and take advantage of all the personal credits and lower tax brackets of the deceased taxpayer. A professional tax advisor can ensure CRA requirements are met and help control tax expenses while giving family members time to grieve.
To lower the burden of tax compliance and implement effective tax planning strategies, contact the charted professional accountants at Mew + Company at 604-688-9198.
About Mew + Company
Mew + Company, is an ideal solution to the taxation problem. With a simple philosophy of building long-lasting customer relationships, the company has been serving corporate clients in a variety of fields—including restaurants, real estate, retail, and the service industry. Investing in their specialist services will undoubtedly be fruitful for all kinds of clients.
To learn more about Mew + Company and discuss their services, log on to https://mewco.ca/.
Lilly Woo, CPA, CA, CFE, CFP
Mew + Company Chartered Professional Accountants
Company Website: https://mewco.ca/