Taxation at Death: Terminal Returns, Double Tax, and Post-Mortem Planning
From the terminal return and RRSP treatment to the five strategies that eliminate double taxation on corporate assets, and the Graduated Rate Estate that makes it all work.
Death Triggers a Tax Bill. How Big It Gets Depends on the Planning.
The deemed disposition at death crystallizes every accrued gain a taxpayer holds. Retirement plans collapse into income. Assets held in corporations create a second layer of tax that can push the total rate to 55% on capital property and 81% on land inventory. The window to act is short, the rules are specific, and the mistakes are hard to undo. This session gives you a clear map of what happens on death, and the post-mortem planning tools to control what happens next.
This is a complicated area with major benefits to effective tax planning. It is high value work that clients want done well. And it is very easy to make big mistakes.
- check_circle The terminal return, in full. Deemed dispositions at FMV, RRSP and RRIF treatment by beneficiary type, rights and things on a separate elective return, spousal rollovers, filing deadlines, and the ten-year instalment option for paying departure tax on capital property.
- check_circle Double taxation and how to eliminate it. When a taxpayer holds appreciated shares in a corporation, the deemed gain on death is taxed personally and the underlying assets are taxed again when the corporation sells them. Five post-mortem strategies address this: selling shares instead of assets, the pipeline (ACB extraction), the s. 164(6) capital loss carryback election, using capital losses against investment gains, and the s. 88(1)(d) bump.
- check_circle The Graduated Rate Estate and why it matters. The GRE is the vehicle for post-mortem planning. Capital loss carrybacks, special donation rules, and up to four taxation years of graduated rates all depend on the GRE being properly created and not disqualified. The session covers what qualifies, what disqualifies, and how to maximize the GRE window.
- check_circle Exceptions that change the calculation. Capital losses in the year of death and the immediately preceding year deductible against all income. Charitable donations claimable at 100% of net income. No AMT in the year of death. Medical expenses over any 24-month period including the date of death. Each of these requires timely action.
What You'll Learn
The session follows the full lifecycle: the terminal return, retirement plan treatment, double taxation mechanics, five post-mortem planning strategies, the Graduated Rate Estate, and a practical checklist for the executor.
expand_more The Terminal Return
- What income is included and when: the accrual rules that apply to periodic payments at death, and the types of income that may surprise you
- Deemed disposition of capital property: what gets triggered, what can be deferred with a spousal rollover, and how depreciable property is treated differently
- Rights and things: what they are, when a separate elective return makes sense, and the personal exemptions available on it
- Filing deadline and balance due: the rules most practitioners get wrong, and the instalment option for large tax bills on deemed dispositions
- Special reliefs available only in the year of death: capital loss treatment, charitable donations at 100% of net income, expanded medical expense window, and the AMT rules
- The clearance certificate: when to apply, what it protects, and why skipping it creates personal liability for the executor
expand_more RRSP, RRIF, and Retirement Plan Treatment
- How the identity of the beneficiary determines whether retirement plan assets are taxed on the deceased's terminal return, taxed to the recipient, or rolled over entirely
- The different treatment for matured vs. unmatured RRSPs, and the elections available when proceeds flow through the estate rather than directly to the spouse
- RRIF successor annuitant rules, the rollover options for financially dependent children and grandchildren, and the limits that apply
- Where rollovers are lost by default and how a joint election preserves them
expand_more Double Taxation and the Five Post-Mortem Strategies
- Why double taxation arises when assets are held in a corporation at death, and how severe the combined tax cost can be if no action is taken
- Strategy 1: selling shares rather than assets, when it works and when it doesn't
- Strategy 2: the pipeline — how to extract the estate's high ACB tax-free, and the CRA safe harbour that governs the timing
- Strategy 3: the s. 164(6) election — how capital losses in the first year of the estate can be carried back to offset the deceased's terminal return gain, the mechanics that generate the loss, and the strict timing rules
- Strategy 4: using capital losses against investment gains in the estate, and how the sequencing of transactions affects the result
- Strategy 5: the s. 88(1)(d) bump on wind-up, and when it is relevant
- The loss reduction rule: the trade-off that arises when a capital dividend and taxable dividend are combined, and how to evaluate whether the strategy is still worth it
expand_more The Graduated Rate Estate
- What qualifies as a GRE and why the distinction from other testamentary trusts matters for every post-mortem strategy in this program
- The tax benefits available only to a GRE, and how to use the year-end election to extend the window to four taxation years of graduated rates
- What disqualifies a GRE — including a common estate structure many practitioners don't realize is a problem until it's too late
- How the GRE year-end choice affects the time available for capital loss planning, and how to coordinate the two
Learn Directly from Tax Experts
Michael Cadesky is the managing partner at Cadesky Tax and a committed contributor to the tax and accounting professions since 1980, earning the title of Fellow from CPA Ontario. He is a past governor of the Canadian Tax Foundation, past chair of STEP Canada and STEP Worldwide, and past chair of the CPA Canada Tax Committee for Small and Medium-Sized Enterprises. Michael is also the co-author of 11 books on tax subjects and the author or co-author of numerous papers and articles on Canadian and international taxation.
As a founding partner of Cadesky Tax, Grace brings more than 25 years of experience in Canadian and international tax, foreign investment into Canada, international acquisitions, tax treaties, Canada/U.S. tax, estate planning, transfer pricing, and tax disputes.
Frequently Asked Questions
Quick answers about registering for this course.
Can I start right away? expand_more
Yes. Taxation at Death and Post-Mortem Planning is available on demand. Register and begin immediately at your own pace.
Does this course provide CPD? expand_more
Yes. You will receive a verifiable CPD certificate for 2.0 hours of instructional learning upon completion.
What is included with registration? expand_more
Registration includes the seminar recording, slides, detailed notes, Technical Corner legislation review, and resource materials. You have one year of access to the program and all materials from your date of registration.
Is there a cost to register? expand_more
Yes. Registration is $150 CAD, a one-time payment with no subscription required.