Client was Common Law

Tax Topics
1

I just found out a client was common law and her partner passes suddenly in May 2023 after filing for her as single since tax year 2021. Funeral home filled out paperwork and she is now receiving survivor benefit. Neither partner had children. Had been filing separately and preparer for deceased is filing the final and T3. Client’s return is otherwise simple.

Wondering if I continue filing her as single or change to widow and put in info for partner???

Any suggestions, ideas etc. greatly appreciated.

Thank you.

2

I’d enquire about whether there are any assets of the deceased’s that are going to the surviving “person”. There’s a rollover at cost for spouses (common-law or married) but not otherwise. Any RRSP/RRIF being transferred?

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3

no rollovers. House belonged to surviving spouse and no other properties. Bank accounts were joint. No children. No RRSP or pensions

4

And no credits received by either party to which they would NOT have been entitled if filed as c/l?

5

If you were filing her tax returns as “single” and now you have evidence that she was lying to you, I would tell her that you you are ethically required to correct her prior year returns, or provide no further services to her. Once you get THAT dealt with, you can discuss how she wants to state her CURRENT marital status. For tax purposes “widowed” doesn’t affect anything differently than “single” (AFAIK). And if she was previously “common law” she can legally claim she is once again “single”. However, if she wants to report herself as “widowed” CRA won’t question it (if she was previously reporting “common law”).