Who should file a T3 return
You have to file a T3 return if income from the trust property is subject to tax, and in the year, the trust:
- has tax payable
- is requested to file
- is resident in Canada and has either disposed of, or is deemed to have disposed of, a capital property or has a taxable capital gain (for example, a principal residence, or shares)
- is a non-resident throughout the year, and has a taxable capital gain (other than from an excluded disposition described in subsection 150(5)) or has disposed of taxable Canadian property (other than from an excluded disposition)
- is a deemed resident trust
- holds property that is subject to subsection 75(2) of the Act
- has provided a benefit of more than $100 to a beneficiary for the upkeep, maintenance, or taxes on a property maintained for the beneficiary's use (for more information, see Line 22 – Upkeep, maintenance, and taxes of a property used or occupied by a beneficiary in Chapter 3 of Guide T4013, T3 Trust Guide), or
- receives from the trust property any income, gain, or profit from the trust property that is allocated to one or more beneficiaries and the trust has:
- total income from all sources of more than $500
- Income of more than $100 allocated to any single beneficiary
- made a distribution of capital to one or more beneficiaries
- allocated any portion of the income to a non-resident beneficiary
A T3 return must be filed when a trust does not have tax payable, however the trust holds property that is subject to subsection 75(2) and from which the trust received income, gains or profits during the year.
A T3 return must be filed when the trusts’ total income from all sources is less than $500, however the trust made a distribution of capital to one or more beneficiaries.
You may not have to file a T3 return if the estate is distributed immediately after the person dies, or if the estate did not earn income before the distribution. In these cases, you should give each beneficiary a statement showing their share of the estate.
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