My client passed away in October 2021. The RRIF was transferred directly to his wife but it went into a cash account, not her RRIF. The deceased received a T4RIF slip box 18 for the full value (it was only $15k). As the RRIF was cashed out, I understand it has to be included into income. But is there any election that will allow me to include it on the wife’s tax return as the qualifying survivor instead of the deceased? It is much more tax favourable for the wife to include the RRIF in her income.
I am hoping someone on this forum is familiar with registered accounts on death. I am trying to make sense of RC4178 and the definitions have made my head hurt. Perhaps it’s that’s late April migraine.
My understanding is that the RRIF proceeds can be transferred to a registered plan for the wife but I think the transfer has to be done in the first 60 days of the next year at the latest (March 1/22).
Were the RRIF proceeds actually received in 2021?
If the deceased had unused RRSP room in 2021, a spousal RRSP contribution could have been made but again, the deadline for that has passed (in order to have it applied against the 2021 income).
Thanks for your reply @kevin . The proceeds were transferred to a cash account owned jointly by the wife and the estate in 2021. She missed those deadlines you mentioned. What’s throwing me off is the optional reporting section in RC 4178:
“If a qualifying survivor receives an amount from a deceased annuitant’s RRIF that qualifies as a designated benefit, the annuitant’s legal representative can claim a reduction to the amount that the annuitant is considered to have received at the time of death.” * Optional reporting
I believe the wife is considered a qualifying survivor but I am unsure if the payout can be considered a designated benefit and if so, how to do I designated it as a “designated benefit”?
