I have reviewed old threads on this issue. Permissibility of specific tax allowable tax treatments is constantly changing with the CRA, and I want to know if anyone has problems with including the $2500 death benefit in the child/beneficiary tax return if the name is on the T4a (p) slip with the deceased parent.
Alternatively, if the T4a(p) is just in the name of the deceased, I would include it in the beneficiary tax return, taking into consideration the tax bracket.
Alternatively, I file a T3 and have done so many times. However, I find the tax on a T3 and my cost to the client are more than reporting on a T1.
Do you have any current experience with this? I am trying CRA to discuss a trust issue and was going to ask, but I haven’t been able to get through all day.
thanks for any advice
I do much the same - advise the client that if the CPP death benefit is the only income earned after DOD, it can be reported on a beneficiary’s T1. This is allowed by CRA, and costs them less than paying us to set up Trust Number and file a T3.
great thanks - makes most sense
I don’t think I’ve ever set up a trust for a death benefit. I almost did a few years ago when a client died ane there were 5 beneficiaries - only one of which was a longstanding client. Asked for names, SIN’s, & addresses for the other 4. Never received the info, never did a T3, client moved to another accountant, no longer my aggravation. One of my clients died last year, T4A in name of The Estate of…, C/O his spouse. I confirmed his spouse did receive the money, and that’s where it will be taxed.