Graduated Rate Estates (GREs) were the key topic of discussion at this year’s STEP CRA roundtable. If you missed it, we’ve got you covered.
CRA representatives were on hand to answer tough questions about GREs, designations to include on an income trust, foreign entity classification, and charitable donations. Associate managing editor Suzanne Sharma live-tweeted their answers. Below is a summary of what happened.
To check out more tweets from STEP 2015, click here.
Live tweets from Step’s 2015 CRA roundtable
Using multiple wills would create difficulties in determining graduated rate @advisorca @STEPSociety So, consider all aspects when estate planning due to graduated rates; CRA jokes it can’t say much more.
A word on preferred shares
For Canadian resident shareholders of U.S. S corporations
And, what if you’re a Canadian resident shareholder of U.S. S corporation? Can CRA provide guidance on para 5 of article XXIX of Canada-U.S. Treaty? @advisorca
In the absence of S corporation, shareholder cannot apply for tax relief, says CRA @advisorca @STEPSociety So, Canadians need to be aware of income if S corporation is computed under U.S. tax rules. And, CRA needs to see application of S corporation in advance.
Tips for trusts
New rule introduced, which deems year-end for trust at death. The gain deemed that of spouse @advisorca
Consider the Supreme Court ruling for 104(13.4)(b)(i); functions as if deceased was alive, so normal income inclusion would apply @advisorca
Say you have interest in a trust as taxable Canadian property and the Canadian resident dies. Then, the estate can create two testamentary trusts; there will be one here and one elsewhere. Then, if principal resident sold, money goes into the trust. Is the capital interest in the second trust considered taxable Canadian property? @STEPSociety @advisorca
In response, CRA says transfer of capital would meet (248). To determine if there’s interest, must look to taxable Canadian property. If distribution of cash occurs within 60 months, it would meet taxable Canadian property @advisorca