T4A showing a Death Benefit

Only 26 days to go…
The T4A is in the name of the deceased.
It is less than $10,000 and therefore not taxable.
The money has been sent to his mother.
On whose return is it reported or does it go on a T3 Trust Return? The CPP death benefit is being reported on the mother’s return. Or because it is less than 10K is it not reported?
Or do I report the income and then deduct it at Line 25600 (or someplace else)?
TIA for any assistance

It will gon on the inheritors’ tax return if the estate is settled within one year after death If not settled it will go on the estate’s testamentary trust return T3

1 Like

The value of the benefit is 9,900$. My understanding is that only the amount over 10K is reported. Is there a place for an offsetting deduction on either the T1 or the T3 returns?

If the survivor isn’t taxable with the additional income, put it on their return.

Thank you for your replies.
Foe better or worse, I contacted CRA. I was told to NOT report the income on any return because the amount is under $10K and is a one-time payment to a single beneficiary.
If the return is filed electronically, the slip and explanation are to remain in my files.
If it is paper-filed (not recommended because it is eligible foe eFile.), then attach a slip with an explanation.

Is this a CPP death benefit? The 10K rule is only for death benefit other than CPP
Line 13000 – Other income: Death benefits (other than CPP or QPP death benefits) - Canada.ca

For the CPP death benefit, you include it on the T3 return or line 130000 of the beneficiary’s tax return.

Taxation of CPP and QPP Death Benefit Amounts - Canada.ca

It’s worth noting at the bottom it says the following:

A death benefit will generally not be taxable if the recipient is not a beneficiary of the estate, and all of the following circumstances apply:

  • the taxpayer who received the death benefit paid the deceased’s funeral expenses
  • the amount of the death benefit is not more than the funeral expenses
  • the deceased has no heirs, and there is no other property in the estate

Wouldn’t THAT be something if CPP death benefit was indexed (again) at some point!