Death and Final Tax Return
Deadlines, what goes on the final return, a worked example, credits that help and the executor's checklist.
The short version
- When someone dies, their executor files a final T1 return for the year of death. It reports income from January 1 to the date of death, plus a deemed sale of everything they owned at fair market value.
- Due date: April 30 of the next year for deaths from January 1 to October 31; six months after death for deaths in November or December. Self-employed: June 15, or six months after death for deaths after December 15.
- RRSPs and RRIFs are fully taxable on the final return unless they go to a surviving spouse or, in some cases, a financially dependent child or grandchild. A TFSA's value at death isn't taxed.
- Property left to a spouse or spousal trust rolls over at cost, so the tax waits until the spouse sells or dies.
- Before distributing the estate, the executor should get a clearance certificate (form TX19), or the executor can be personally liable for the unpaid tax.
Death and the Final Tax Return
Being an executor is an honour nobody applies for. Along with the funeral, the house and the siblings, you inherit a tax deadline and personal liability if the tax isn't paid before the money goes out. The good news: the rules are clear, CRA has a well-worn process, and most final returns are ordinary returns with a few extra lines. The two that make the bill big are the deemed sale of property and the RRSP. Here's the whole job.
Deadlines
| Date of death | Final return due | Balance due |
|---|---|---|
| January 1 to October 31 | April 30 of the next year | April 30 of the next year |
| November 1 to December 31 | Six months after the date of death | Six months after the date of death |
| Self-employed (or spouse was), death January 1 to December 15 | June 15 of the next year | April 30 of the next year (six months after death for November and December deaths) |
| Died before filing last year's return | Later of the normal due date and six months after death | Same |
Late returns attract the usual 5% plus 1% a month penalty on the balance; see CRA penalties and interest.
Executor for the first time?
Tell the assistant the date of death, province, and what the person owned: home, cottage, RRSPs, investments, a business. It lists the returns due, the deadlines, the likely tax and the steps in order.
What Goes on the Final Return
| Item | Treatment |
|---|---|
| Income to the date of death | Pension, employment, CPP, OAS, interest and dividends earned up to that date |
| Capital property (investments, cottage, rental) | Deemed sold at fair market value; half the gain is taxable; see inherited property |
| Principal residence | Deemed sold too, but usually exempt; see principal residence exemption |
| RRSP or RRIF | Full value is income, unless left to a spouse (rollover) or a financially dependent child or grandchild; see RRSPs and RRIFs at death |
| TFSA | Value at death is tax-free; growth after death is taxable to the estate or the beneficiary |
| Property left to a spouse or spousal trust | Rolls over at cost; no tax until the spouse sells or dies |
| CPP death benefit (up to $2,500) | Taxable to the estate or the recipient, not on the final return |
A Worked Example
Ontario widow, dies in June 2026. Pension and CPP to that date $30,000; RRIF $250,000; a cottage bought for $150,000, now worth $550,000; her house is her principal residence.
| Amount | |
|---|---|
| Pension and CPP | $30,000 |
| RRIF, fully taxable (no spouse) | $250,000 |
| Cottage: gain $400,000, half taxable | $200,000 |
| House | $0 (exempt) |
| Total taxable income | $480,000, mostly at the top rate of 53.53% |
That's a tax bill well over $200,000 from a person whose income was $30,000 a year. It's why the estate has to hold back money, and why spousal rollovers and planning matter. The cottage rules are on cottage capital gains.
Selling the family home or cottage after a death?
The Home and Cottage Sale SmartFile works out the deemed gain, the principal residence designation that saves the most, and fills in form T2091(IND) for the final return.
Credits and Deductions That Help
- Donations: in the year of death, donations (including by will) can be claimed up to 100% of net income, on the final return or the prior year's; see charitable donations.
- Medical expenses: any 24-month period that includes the date of death; see medical expenses.
- Capital losses: unused net capital losses can be deducted against any income in the year of death or the year before.
- Full personal credits: the basic personal amount and age amount aren't prorated.
- Optional returns: for "rights or things" (such as unpaid salary or declared dividends), business income and some trust income. Each gets its own basic personal amount and brackets, which can save real money.
The Executor's Checklist
- Notify Service Canada and CRA of the death (funeral homes often do Service Canada) and stop benefits.
- Gather slips, the last notice of assessment and the cost of investments and property.
- Get values at the date of death: appraisals for property, statements for investments.
- File any unfiled prior-year returns, then the final return and any optional returns.
- File T3 returns for the estate's own income after death; see estate taxes in Canada.
- Pay the tax, wait for the notices of assessment, then request a clearance certificate with form TX19.
- Distribute the estate only after the clearance certificate, or hold back enough to cover any reassessment.
Probate fees are a separate cost from income tax; see probate fees vs income tax. Beneficiaries wondering what they owe should read inheritance tax in Canada.
Final Return Questions
When is the final tax return due after someone dies?
April 30 of the following year if the death was from January 1 to October 31, and six months after the date of death if it was in November or December. If the person or their spouse was self-employed, June 15 for deaths up to December 15.
Is an RRSP taxed when someone dies?
Yes. The full value is income on the final return, unless it goes to a surviving spouse or common-law partner, or in some cases to a financially dependent child or grandchild.
Is a TFSA taxed at death?
The value at the date of death is not taxed. Income or growth after death is taxable to the estate or the beneficiary.
What is the deemed disposition at death?
The person is treated as selling all capital property at fair market value just before death, so capital gains are taxed on the final return, unless the property goes to a spouse or spousal trust.
Does an executor need a clearance certificate?
It is strongly recommended. Without one, the executor can be personally liable for unpaid tax up to the value of property distributed. Request it with form TX19 after the final assessments.
Step-by-step duties for the person in charge are on executor tax responsibilities, and a quick estimate of the bill in the estate tax calculator.
Sources: CRA, Filing and payment due dates; Apply for a clearance certificate; IC82-6 Clearance certificate. Checked October 2026. The rollover, RRSP, TFSA, donation and capital loss rules are summarized from CRA's guide T4011 and the Income Tax Act as we understand them. The example uses 2026 Ontario rates and is approximate.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.