T5 of Estate Bank Account after Final Returns have been filed and Notice of Assessments Received | Income tax filing | Discussion forum

It seems to me this new T5 is a 2022 tax year item, not 2021 as the OP did tax returns for last year. How can you do a T1-ADJ on a 2022 tax return if one has not yet been filed?

From my perspective, this T5 would technically be on a T3 trust return with either income tax paid via a T3 tax return or a T3 tax slip be generated from the trust to the beneficiaries to pass through the T5 income to beneficiaries to put on their individual T1 tax returns. Am I missing something?

AltaRed said
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Added anecdote: Always move funds to estate bank accounts that do not pay interest and this problem will not arise.

Don't do that before looking at the amount of funds involved.

One relative was given that advice. Close to $1 million in cash in the estate. Bank would have loved having those funds in a non-interest paying account!

In the brokerage account, the funds could easily earn $2,500+/month of interest in one of those brokerage ISA's. It will be months before the deceased's final return and first estate return could even be filed!

A second estate return the following year isn't going to cost $2,500 to prepare.

Your call. I have never tried it.

You actually didn't make a mistake.

The final T1 return covers up to date of death. The first estate T3 return covers from date of death and onward. Bank accounts are frozen once bank learns of death, often until the will is probated.

So, it is unlikely you would be able to move the money out on the date of death.

The T5 slip goes on an estate's T3 return. Executor is the trustee of the estate but is not the estate. So, any T3, T5, and other slips from the estate accounts never go on the executor's personal T1 tax return.

DaveX64 said
I'll sleep on it for a couple of days. I'm meeting my bank dude to move the money on Wednesday, I'll decide after that.

I'll post back the outcome so others can learn from my mistakes or success 🙂  

Personally, I wouldn't value a bank dude's opinion on estate tax matters for a nickel so if you want to 'wing it', go ahead.

It might take you 30-60 minutes to do a T3 estate tax return using the fillable PDF with most of that time entering structural data on Page 1.

Hint: Select GRE estate mechanism since this is a one time deal and it will have a lower tax rate. https://www.omh.ca/articles/testamentary-trusts-and-graduated-rate-estates.html

What name is in the Recipient's Name box of the T5?

If this income was earned after date of death then it's the estate's income. Did you establish a date that the estate terminated or is it still active (appears to be based on fact there's still $40K earing a bit of interest in an estate account)?

Based on the amount I'd do nothing with it. It seems you didn't file an estate return, it's not your income, so I'd just wait and see if they ever ask about it and then just do what they say at that point. I'm guessing their computer won't flag such a small missing T5 if made out to an estate they've never received a tax return from, it's a few bucks of tax, though I could be wrong.

I had a similar experience involving an estate, with paying a large amount of interest personally on a T5 that had a different name on it and CRA went after the named T5 entity for the interest anyway and ignored the fact I'd paid tax on it already on my own return (and on a higher marginal rate), even after they had originally told me ahead of time that would be ok to do. It took me months before they finally straightened things out, hence my suggestion not to report this small amount, let them come after you if they ever find it. Can you distribute the remaining funds, as it appears this will happen again with a 2023 T5?

Bill said
Based on the amount I'd do nothing with it. It seems you didn't file an estate return, it's not your income, so I'd just wait and see if they ever ask about it and then just do what they say at that point. I'm guessing their computer won't flag such a small missing T5 if made out to an estate they've never received a tax return from, it's a few bucks of tax, though I could be wrong.

I had a similar experience involving an estate, with paying a large amount of interest personally on a T5 that had a different name on it and CRA went after the named T5 entity for the interest anyway and ignored the fact I'd paid tax on it already on my own return (and on a higher marginal rate), even after they had originally told me ahead of time that would be ok to do. It took me months before they finally straightened things out, hence my suggestion not to report this small amount, let them come after you if they ever find it. Can you distribute the remaining funds, as it appears this will happen again with a 2023 T5?  

I would go this way, i.e. not file a T3 trust return and see if CRA comes calling rather than do something totally erroneous like put it on the Executor's return. Chances are it is not worth it for CRA to chase 15%(?) tax on $179, and yes, it will happen yet again for 2023 YTD.