I have a client who was killed in an accident last year and whose assets consisted only of home (PRE), cash, RRIF, TFSA and an Alberta PS pension which continues to his spouse. I’ve filed a terminal return. All the non-reg assets are JTWROS and all the rollovers are done (I believe some completed in 2026). All the JTWROS assets have been transferred.
I’m thinking there will be no further things to do for the deceased, and the spouse will get a T4RIF if applicable. Am I likely right in this thinking? If so is there a point to filing for a Clearance?
I have a similar situation and have been trying to research deemed dispositions on death especially with non-registered investments/assets jointly held with right of survivorship with surviving spouse. Originally my initial thought was why if it’s joint with the spouse. (This may tie in with why a clearance certificate might be wise). So far it seems every non-registered investment/assets jointly held should be described and reported as a deemed disposition at acb on the deceased’s final return with a corresponding disposition value resulting in no gain or loss. In my observations over the years i rarely see rollovers reported. In the case of investment accounts, is the practice to report the rollover on an account by account basis or individual holdings?
You don’t say whether you reported the deceased’s dispostions of the non-reg assets on his Schedule 3?
You also don’t say if it is actually the spouse who is the client (ie Executor).
The executor should always get a clearance - the surviving spouse/Executor would not want to welcome any nasty surprises in the future from years in the past from earlier returns.
If there are any assets that have cap gains in past or possible in the future, I do request the Clearance Certificate even if exec and beneficiary are the same; otherwise if simple assets (term deposits, savings), then I suggest not required. Agreed with above, gives surviving spouse peace of mind and no surprises later.
Sounds like the risk is low for any future review or query by CRA, but I generally recommend the executor (or legal rep for the estate) apply for clearance anyway. The T1X such a simple little form, so why not file it? If they don’t want to find it online and fill it out themselves, I can prepare it in about 5 minutes, get them to sign it, submit to CRA electronically, and charge them $50.
You mean a TX19? If you just send in the form that’s an incomplete application. There is supplemental information required, as explained on the form itself.
In most cases, the “supplemental information” has already been submitted by that point (will, death certificate, etc). But, you are correct - in some cases, additional info may be needed. In my 35 years of submitting these for clients (without supplemental info), I’ve only seen CRA deny one twice.
@palmateer The 70(6) spousal rollover on death is automatic provided the surviving spouse becomes the beneficiary of the assets. So for a joint non-reg investment account, there should generally be no DD on the final and I would only report if you specifically want opt out of the rollover.
Do you find that applying for a clearance certificate tends to draw more CRA reviews/requests for information? I wonder if it’s more hassle than it’s worth if the executor and beneficiary is the same person anyway. A clearance certificate doesn’t prevent future audits or taxes owing, it just protects the executor to a certain extent.
“So for a joint non-reg investment account, there should generally be no DD on the final”
Since that is not what CRA and ITA says regarding the deceased’s portion, @palmateer will have a choice between following various internet forum posts, or doing it the correct way by following what CRA and the ITA say.
I think you may be wrongly interpreting things here. @versa is correct.
From folio S6-F4-C1 When a taxpayer dies, there is a deemed disposition of capital property owned at the time of death. This deemed disposition results in tax consequences. However, these tax consequences can be deferred with a rollover if the requirements of subsection 70(6) are met.
That’s just in the general introduction. The operation of the Election, from reading the ITA is somewhat complex due to various references and backtracking, but appears to support this, if the facts are compliant.
From the 2014-0523091C6 STEP roundtable with CRA (although the question asked is whether the rollover applies if someone had both a spouse AND a common-law spouse):
“The disposition of the person’s property or assets will still need to be reported as a part of Schedule 3 of the final return. However, the proceeds are deemed to be the same as the property’s adjusted cost base right before the owner’s death. As a result, the capital gain or capital loss reported on Schedule 3 will be zero.”
S70(6)(d)
*(d) subject to paragraph 70(6)(d.1), the taxpayer shall be deemed to have, immediately before the taxpayer’s death, disposed of the property and received proceeds of disposition therefor equal to
(i) where the property was depreciable property of a prescribed class, the lesser of the capital cost and the cost amount to the taxpayer of the property immediately before the death, and
(ii) in any other case, its adjusted cost base to the taxpayer immediately before the death,
* @versa may want to revise their approach.
When 70(6) applies, there is still a deemed disposition. The rollover provision does not eliminate the deemed disposition, it just makes it at ACB instead of FMV. The dispositions still need to be reported.
That’s not the supplemental informatoin I was referring to. I’m talking about the list of assets at death, estate transaction summary, final distribution plan, details of beneficiaries, that sort of thing.
