Earlier today I completed a trust return for a stub-period testamentary trust that became outside of the 36 month GRE period on November 10th, 2025. The stub period started November 10th, 2025 and ended December 31st, 2025
While completing the Schedule 15 I received a strange diagnostic message in Part A - Is this the first time the trust is providing beneficial ownership information?
The TaxCycle diagnostic message reads as follows;
“The Schedule 15 beneficial ownership information is not required for trusts with a tax year in existence less than 90 days. Filing a return with this data populated may result in penalties due to filing non-required information”
What concerned me was being assessed penalties for filing information that was not required…. although I’ve never heard of this before.
In any event, I heeded TaxCycle’s advice, deleted the information from the Schedule 15 and made a memo to input this information in 2026 (when the tax year would be more than 90 days).
I filed the T3 return, which was immediately assessed to include a $100 penalty as follows;
According to our records, your trust must provide beneficial ownership information on a Schedule 15 every year. Because you did not file the trust’s information by its filing due date or the information was incomplete, we assessed you with a late-filing penalty of $100.00 under subsection 162(7) of the Income Tax Act. This penalty may continue to increase, up to a maximum of $2500. We may reassess this penalty until we receive the trust’s beneficial ownership information.
Now to pay the $100 for being stupid and figure out the best way to get the Schedule 15 information to the CRA without the fine accumulating to $2,500. I can’t file a T3-ADJ because nothing has changed.
That was my thought too @Kevin, but the diagnostic warning threw me for a loop. I was going to ignore the message, but the “penalties for sending too much info” warning concerned me.
Also, for the developers;
It was really handy to be able to create a “stub period trust” directly from within the T3 return in TaxCycle, by hitting “Data” and “Create T3 Stub Period Return”.
Unfortunately, when you efile the stub period T3 return you get an efile rejection because the software assigns the same DCN to the stub period return as it assigned to the deceased’s GRE return (the period prior to the stub period). A+ for effort though.
Oh….. and the CCA forms for the T776 of the T3 are still in “Preview Only” ….. filing due date is next Tuesday.
I’ve been there many times questioning myself over what a computer is telling. The computer is right more often than not, but obviously not 100%. I would’ve done the same as you!
@snoplowguy I will add my comment on T3’s CCA. As you know we updated CCA for T1 and T2 last week. We are currently working on updating T3 CCA and we are working as fast as we can.
On T776 in T3, if there is no new addition in 2025, then you can go ahead and prepare T776CCA/Asset and file the T3 return. Given that the due date is next Tuesday, I am guessing that the trust Y/E is December 31, 2025. But, if the trust has additions in 2025, you can make some overrides in the T3’s T776CCA to apply Reaccelerated Investment Incentive and file the T3 return. There is a documentation on how you can do this.
Alternatively, you can prepare T776 in T1 and simply copy the result to T3’ T776CCA. Essentially, what you would need to do is to override columns 12 and 14 in the CCA table.
For example, for class 10, under the RIIP rule, additions in 2025 is grossed up by a variable of 50% (same variable for class 1 building) for the purposes of calculating CCA. Let’s say that class 10 addition was made in 2025 @ $100,000. CCA under the RIIP rule would be $45,000. [($100,000 + $50,000) x 30%]. So, in this case, you would need to override columns 12 and 14 in T776CCA form as follows:
Of course, this gets a bit more complicated if CCA limitation applies where CCA cannot create or increase rental loss so you may have to do some manual calculation to limit the claim of CCA.
The variable applied to gross up UCC depends on the CCA class. These variables can be found in TaxCycle T3’s form called RIIPNote which lists all the variables by class.
If you have any questions, I am happy to help. Let me know. My apologies.
The suggestion message you mentioned has been modified to factor in first year filing trusts (as opposed to those just reporting a tax year < 90 days) as part of the criteria to activate the suggestion and also has revised wording (from a few releases back).
