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These are the optional tax returns that can reduce tax for the deceased's estate

In Canada, after a person dies, the due date for filing his or her tax return is typically one of two dates:

  • Either April 30 of the year following the year of death
  • Or six months after the death date

Whichever date is later is the date that applies.

Now that April 30 is a little more than a month away, now is a good time to discuss the tax-related duties of executors.

As we've said before, being an estate executor can be a full-time job in itself, and depending on the size and complexity of the estate, correctly filing the deceased's tax returns may be particularly complicated.

For example, it may be necessary to file two separate tax returns:

  • The final return, which is the tax return typically filed by an individual -- this return covers taxes payable from Jan. 1 to the date of death
  • And a return for rights or things -- this is a report of income earned but not yet received by the deceased at the time of death

Like a return for a partner or proprietor and a return for income from a testamentary trust, a return for rights or things is an optional tax return. These allow for the elimination or reduction of tax for the deceased's estate.

Examples of income for which a rights or things return may be appropriate include:

  • Employment rights or things such as salary, vacation pay and commissions the deceased had earned but not received
  • Old age security (OAS) benefits
  • Canada Pension Plan benefits
  • Unpaid dividends
  • Unpaid and not previously reported bond interest
  • Matured bond coupons that have not been cashed

At Hagel Lawfirm, we help executors in Ontario meet all of their estate-related obligations, including the correct filing of tax returns. To learn more, please see our overview of probate and estate administration.

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