@tome “Does the estate require a BN in order to do the T4’s”
Yes. A Payroll account needs to be set up (short-lived though it might turn out to be).
. “My stepson is executor for his Grandmother’s estate”
It is quite rare (and only in very simple circumstances) that a novice executor does not need to hire the expertise of both a qualified CPA and a qualified lawyer.
There are many potential risks awaiting an executor, and plenty of detail, much requiring specialist knowledge… He should be prudent and cautious…
Did you stepson actually get paid the executor’s fee? If so then a T4 must be prepared for the amount received (to gross up for the CPP that should have been withheld). If it’s difficult to get a payroll number because CRA doesn’t yet know about the Grandmother passing and the naming of the executor in the will, then paper file the T4 and T4Summary on Mon., Mar. 1 without it.
If you’re just planning ahead, some executors who are also beneficiaries of the will do not take the executor fee since the inheritance is tax free.
A lawyer has been hired and estate & will are very basic. Will is being probated. No real Estate and cash in bank account. Had been residing in a nursing home until her passing.
It surprises me to see how many flowers there are in this carpet. If it’s an testamentary trust, yes the estate can claim the costs including the executor’s fees. If the estate is settled within the year after death it is a final return no cost can be deducted. The executor is obliged to report his income. One can spend hours looking for rules and regulation to follow to the point of discouragement or anxiety. The bottom line is that the tax people will want to see the income reported even if they do not know about it. If they question the manner of reporting, goodwill will prevail.
No the estate cannot claim costs regarding executor fees for tax deduction. They are generally on account of capital.
Hence my comment that executors almost always need to hire both a qualified lawyer and a qualified CPA…
CRA can and will come after the executor personally later, should the executor be so careless as to not comply with the Act and obtain all relevant Tx21s
Executor’s compensation can only be claimed as a expense for the estate if complete and total records have been maintained regarding the portion of the compensation that is applicable to income collections and expense disbursements on account of income. An estimate is not appropriate.
CRA will come after executor(s) personally for unpaid taxes and penalties if they have made errors or omissions from the filings.
Retaining a competent and qualified accountant and lawyer is a minimum safe distancing maneuver