My mother passed away last week, I have sent a request for the book value and market value of the stock certificates,hopefully to the correct transfer agents addresses-some of this was confusing and will need advices re what to do next and the income tax for her small estate. We had joint accounts so that part is not an issue, and she had no other property.
---------------------------------------------------------
david ingram replies:
After compiling all of the information, there is not an awful lot that you can do today about your mnother's final tax return.
1. You should get the application in for the CPP death benefit if Mom was receiving Canada Pension Plan.
2. If she was receiving CPP and the OAS, you should notify the Payers of her date of death.
3. If she was receiving any other pensions, you should notify those payers as well.
----------------------------
Then, you have to be aware that eveything that your mother owned on the date of death is considered to have been sold and reacquired on that date.
So, if your mother had a stock she paid $1,000 for and it was worth $1,300 on her date of death, her final 2007 tax return will have to account for that $300 profit as a capital gain.
Conversely, if she paid $2,000 for a stock and it was worth $1,500 on her date of death, her final return will have to account for the $500.00 loss.
If she owned a RRIF or RRSP at the date of death, the entire amount will go on the final return as taxable income
----------------------------------
Her final return (dur April 30, 2008) will then include:
* Any interest paid to her up to the date of death
* Any dividends paid to her up to the date of death
* Any capital gains or capital losses incurred up to the date of death (if she sold anything herslf)
* Any capital gains or losses created by the deemed sales of the stock (or a second property as an example)
* any pensions paid to her until the date of death.
-------------------------------
If she had bond interest, dividends or rents that were due to her but not paid at the date of death, it is also possible to prepare a second return to report these "rights and things".
-------------------------------------------------------
The good part is that with everything in joint tenancy, there will be no need to probate a will or file an estate tax return,
-------------------------
But, because of this, the CPP death benefit (if there is one) will be taxable on your return
In the meantime, getting the value of the shares on her datre of death is exaclty what you should have done. The purchase price is also important and that may be different than the book value at the broker she was dealing with if she moved her account after purchasing the shares.
Comments (0)
CEN-TA Cross Border Services - Tax, Visas, Immigration
http://www.centa.com/article.php/20070716224111915