Deceased Taxpayer

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"


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Last Updated Friday, July 10 2009 @ 02:19 PM PDT|12,641 Hits View Printable Version