IT-531 goes on to state the T5 should be reported in either the Estate’s Income but more often assuming the income was received by the executor of executrix, the T5 is reported in their income. Unless, the recipient was a spouse in
which case if attribution applies then the income could be reported in the contributors (deceased’s)
“An Income Inclusion Occurs When Funds Are Distributed From an EFA
¶ 15. If an amount is distributed from an EFA otherwise than as payment for the provision of funeral or cemetery services for an individual – a distribution would typically occur because the arrangement is cancelled or
because not all the funds held under the arrangement are needed to pay for the funeral or cemetery services – the person who receives the amount (referred to in this paragraph as the “recipient”) is generally required by subsection 148.1(3) to include an
amount in income. For subsection 148.1(3) to apply, the amount must be paid from the balance held under the arrangement for an individual (referred to in this paragraph simply as the “individual”)
“Paragraph 201(1)(f) of the Income Tax Regulations (which took effect for payments made after 1995) requires that an information return be made in prescribed form – i.e., a T5 Summary and the related T5 slips (or on magnetic
media) – by a person (e.g., a custodian) paying an amount that must be included in the income of the recipient under subsection 148.1(3). By virtue of subsection 205(1) of the Regulations, this information return must be filed (without notice or demand) on
or before the last day of February of the year following the calendar year for which the amount is paid. See the T5 Guide – Return of Investment Income for more information on T5 reporting requirements for EFAs.
An amount included in income under subsection 148.1(3) is categorized as income from property.”
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