Hi, my mother has just passed away, and I’ve come across three questions regarding her tax filings for next year. She owned one rental apartment and one rental house, both under her name. She has no will.
The rental apartment is held in joint tenancy with my sister. However, my sister has been the only one reporting the income and filing taxes for that property. In practice, she appears to be the sole beneficial owner, and my mother was only on title. The only supporting evidence of this arrangement is that my sister has been the sole filer in her tax records; my mother has never reported this apartment in her own tax filings. In this situation, would CRA still require us to report and pay capital gains on my mother’s share of the property.
For the second property, the rental house was solely owned by my mother. We are considering rolling it over to my father so that no immediate capital gains are triggered. Does this require the executor to first transfer full legal ownership to my father in order to achieve a 100% rollover? Also, if we were to add my two brothers as joint tenants, would that mean my father’s rollover would effectively apply to only one-third of the property instead of the full amount?
My mother passed away at the end of March. Who is responsible for reporting and filing the tax return for the rental income from the second property starting in April? Can I just file everything under my father tax return next year and my father is also the executor.
I am sorry for your loss. If your mother just passed away in March of 2026, you have until next April to file her final return which would be from Jan 1, 2026- the date of death. Any income received after this date in her name would be filed on an estate return (T3 trust return).
Most of your questions depend on what her will says. If she left everything to her spouse, then the tax rollover is automatic and nothing needs to be done. The executor is the one responsible for all the filings and all the taxes. It’s a role not to be taken lightly.
I highly recommend you see a qualified accountant because final returns and estate returns (not the same thing) can be quite complicated and real estate transaction are under particular scrutiny by CRA these days.
Thank you for your reply and suggestions. We are planning to engage an accountant to handle everything next year, but before then, we need to understand the process so we can prepare in advance, especially in case there is a significant capital gain.
My mother did not leave a will, and I am one of the executors, so I want to ensure everything is handled correctly. That is why I need to understand the tax consequences before making any decisions about transferring titles.
Questions 1 and 2 relate to a potentially large capital gain. It seems there may be a way to defer it, but I am not sure how that works.
For Question 3 regarding the T3, after your hints and some additional research, I now have a better understanding of the process. (1) Get the “Certificate of Appointment” from the court (2) Using that Certificate to apply for the “Trust Account Number” (3) Using the Certificate to open a new Estate account and ask the Bank to make the transfer. Hopefully this is correct steps.
Like I said, no tax consequences if everything was left to her spouse (assuming that is your dad)? Depending on the province, there are different rules for handling assets when someone dies without a will. Sounds like you need a lawyer to sort out asset distribution before figuring out capital gains (if any). You also don’t need to wait until next year to find a good accountant.
And don’t rush into setting up a trust… yet. If all assets are in fact transferred tax-deferred to your dad, there is no estate to deal with. They become his assets and his income after her death.
Versa, thank you again for your reply. Yes, this is about my dad. I already have a lawyer, and he advised that as executor I can distribute the estate as needed as long as all parties agree.
That is why I am now looking for an accountant to confirm the details, since CRA’s treatment may differ from how the Ontario government handles the rollover.
Thanks again for your help. I really appreciate it.
“My mother did not leave a will, and I am one of the executors”
Mmm- No -
That is legally impossible.
As Versa said above, you need a professionally qualified Accountant.
But much more importantly, before touching anything at all in the estate, or trying to hire Accountants on you own behalf, you have to meet with a professionally qualified lawyer.
They will guide you through a court application process, to establish if you have any powers or authority whatsoever.
The Court will appoint someone. If you wish that to be you, the lawyer will assist you in applying to Court.
It can be very dangerous and very expensive for you to try to intermeddle in the estate without such authority, so I would very strongly recommend that you do absolutely nothing at all other than meet with a professionally qualified lawyer.
Sorry for your loss - it can be overwhelming.
On the facts that you presented here, it is impossible that you are the “executor”.
The lawyer that you speak to should be a lawyer specializing in Estates, and you should personally engage them and pay their retainer.
A professional Accountant that you subsequently may try to hire will have to to see your court authority documents, or they will have to refuse to accept you as a client acting on behalf of the Estate.
abechew309, thank you for your reply. I have already hired a lawyer, who will apply for my father and me to act as executors, and has confirmed that this is feasible.
I will also make sure to consult an accountant before transferring the title, as the potential capital gains could be significant if it is not handled properly
You will not be allowed to transfer title (or do any distributions) without your court documents (and in some respects, without a tax clearance certificate from CRA).
Also, you can never be an “executor”, since you mother did not have a will.
Please take the Court’s direction on this.
If your lawyer specializes in Estates, he should be able to explain what the application to court will entail, and what will result from it.
As an aside, since your mother died intestate, you may also wish to discuss with your estate’s lawyer how much you wish them to assist you with estates administration, or if you may wish to get a professional executor person or firm to be appointed administrator. Discuss the details and risks with the lawyer.
Just a quick note (maybe too late), but you don’t necessarily need a lawyer - you can apply for the “Letters of Administration” directly from the Court of Kings Bench. However, if you are not savvy with the legal documents/application forms, it could be difficult.
It is obvious and apparent that the poster is not an Estates professional,
It is very unwise in the extreme to attempt to proceed without at least one or more such in the mix.
I am not a lawyer but that doesn’t sound right at all. How can you transfer assets without the legal ability to do so? You’re legally not the executor, not until the court grants it and your name is not on title of any of these assets. You have no legal authority right now. I think you have to wait until the appointment of estate trustee is granted. In Ontario this can take months.
Yes, I’m hiring an Estate Lawyer. I’m not trying to transfer the title now. Everything will be done after I got the certificate from court and I paid the probate fee. My father is also an executor, not just me.
Sorry, I may skip one step. I’m preparing everything right now. Once I and my father granted as executor, we will proceed the plan. Yes, I know it will take at least few months.
Again, unfortunately, you have many many misconceptions in this area.
Again, you will never be “executor”
Huge risks. Particularly Inteststate can have huge risks.
Do not proceed DIY with “internet advice”
Proceed only with every step monitored by professionals that you specifically have on retainer.
In addition, this forum is only a tax preparers forum for specific software users.
It is impossible for it to substitute for specialized and specific legal case advice.
“FREE” advice is worth exactly what you paid for it, as the old saying goes…
Alright in that case, wait until the appointment comes through. Look if were me, this is what I’d do.
Joint rental property - let it pass to the sister tax free, no probate. Sounds like it was beneficially hers anyway (who was paying the mortgage.)?
Solely owned rental property - Probate will apply, then transfer to you dad. Then he can “sell it” to whoever he wants. Could be your brothers.
Your dad would report the income because the property would transfer to him
EDIT - But also find an accountant to handle this for you. It’s good to do research ahead of time as I understand this is very overwhelming and you’d be surprised how many “accountants” don’t really know all the rules. Plus tax time is a very very busy time for accountants and they may tend to rush so good to look for someone reliable in advance.
Thanks Versa. For#1, there is no mortgage. For #2, I sort of understand the rollover, just need to find an accountant to confirm, but my father will not sell the property yet, so the income will report when he sell it later on.
