There are two
situations when a person is entitled to file TWO returns with full deductions
and exemptions in one year. One is upon the death of a person. In this case, one
return is prepared including all monies received up to and including the day of
death, and another return is filed including all amounts that the taxpayer had a
"RIGHT" to but had not received at the date of death.
These amounts would
include accumulated sick pay on a final paycheque, accrued interest on Canada
Savings Bonds, Term Deposits, and the largest in the case of a self-employed
person, Accounts Receivable. It does not include Holiday Pay.
It is important in
these situations to obtain accurate figures from the respective financial
institutions. It has been my experience that most institutions do not understand
the request so be very specific when this situation arises. Ask for a letter
showing the interest accrued from the last pay out until the date of death. Ask
for another letter showing the interest accrued from the date of death until the
pay out to the estate, yourself, etc. When you have these figures, file two
returns for the deceased. One for money PAID or credited up to the date of
death, another for the money earned but not received or credited until after the
date of death. Claim Full Exemptions on both returns. Mark the second return
(across the top of Page one) "RIGHTS"
