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ARTICLE · 14 AUGUST 2017

Estates May Need To Take Steps To Trigger Losses During First Year

McLennan Ross LLP
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Proposed tax amendments have significantly limited options available for dealing with shares of private corporations in estates. Executors may now need to take active steps to trigger losses...

CanadaFamily and Matrimonial
MaryAnne Loney
MaryAnne Loney
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Proposed tax amendments have significantly limited options available for dealing with shares of private corporations in estates. Executors may now need to take active steps to trigger losses to avoid significant tax consequences.

On July 18th, 2017, the Department of Finance released proposed changes to the Income Tax Act (the "Act"). These changes have the stated aim of eliminating many of the tax advantages of private corporations.

While the proposed legislation is not directly aimed at estates (which are granted special tax treatment as graduated rate estates ("GREs") during the three years after death) one of the proposed changes could have significant negative tax consequences for GREs and their beneficiaries.

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