If you’re settling an estate in Toronto or the GTA, the tax work often goes beyond the final personal return. When an estate earns income after the date of death – interest, dividends, rent, capital gains, or business income – it may need to file a T3 Trust Income Tax and Information Return (often called a T3 trust return or T3 estate return).
The challenge isn’t usually “filling in a form.” The challenge is documentation: cost-based records, investment slips, real estate closings, and beneficiary distributions that must tie out cleanly. Done right, a T3 filing is part of an audit-ready estate administration package – not a last-minute scramble.
(The CRA form name is “T3 Trust Income Tax and Information Return.” Estates often file a T3 because an estate is generally treated as a trust for tax purposes.)
What is a T3 estate return?
A T3 estate return reports income and deductions earned by the estate after the date of death. Depending on how the estate is administered and what is paid or allocated to beneficiaries, the T3 process may also involve reporting amounts to beneficiaries and maintaining defensible working papers.
When do you need to file a T3 trust return for an estate?
A T3 is commonly required when the estate has ongoing income or taxable activity after death, such as:
- Investment income: interest, dividends, fund distributions earned in estate accounts
- Capital gains/losses: from selling investments or property after death
- Rental income: from Toronto/GTA real estate held by the estate
- Business/partnership income: if interests continue during administration
- Foreign income or cross-border holdings: where additional coordination is needed
- Beneficiary distributions: when reporting must match the estate’s administration and documentation
Even “simple” estates can become complex quickly if there are multiple accounts, private shares, real estate sales, or cross-border assets.
T3 vs. Final T1: what’s the difference?
Most estates involve at least two separate tax filings:
- Final T1 (personal return): income up to the date of death
- T3 (estate/trust return): income earned after death inside the estate
In practice, the T3 often becomes the estate’s “operating return” while administration is underway – especially if assets remain invested or properties are sold later.
Toronto estate situations where T3 filings commonly get complicated
We frequently see issues arise when estates involve:
- Multiple brokerage accounts with unclear or incomplete cost base history
- Toronto condo / home sales after death (closing documents, allocations, fees)
- Private company shares, shareholder loans, or intercompany balances
- Staged or partial beneficiary distributions over time
- Cross-border holdings (U.S. brokers, foreign income, non-resident beneficiaries)
What you’ll need to prepare a T3 estate return
A clean filing depends on clean inputs. Typical requirements include:
- Estate/trust details (estate name, trustee/executor, key dates)
- Estate bank and investment statements for the filing period
- Tax slips and summaries (where applicable)
- Real estate sale documents (closing statement, legal fees, commissions)
- Estate expenses (professional fees, interest, carrying costs)
- Distribution details (amounts, dates, beneficiary allocations)
- Prior filings and CRA correspondence (if any)
If records are messy, the fastest path is usually structured clean-up: reconcile accounts, confirm cost bases, document assumptions, and build a clear support package.
Common mistakes on T3 estate returns
1) Missing or incorrect cost base
One of the biggest drivers of avoidable errors – especially with older holdings or transferred accounts.
2) Distributions that don’t match reporting support
Beneficiary payments and allocations must be documented and consistent with administration records.
3) Real estate sales without an organized closing package
Toronto property transactions can be material. Missing documents create delays and risk.
4) Treating the estate like “one more personal return”
An estate file is typically a compliance package, not just a single return.
Deadlines and timing (what to know)
T3 filing requirements and timing can depend on the estate’s structure and year-end choices. The most important operational point is this: don’t wait until the last minute to gather documentation, especially if the estate holds investments, property, or foreign assets.
A disciplined approach – monthly record collection, reconciliation, and a running support file – reduces surprises and avoids rushed decisions.
How Valua Partners supports T3 estate returns in Toronto
Executors and families come to us when they want a T3 return that is accurate, defensible, and cleanly documented. We bring 40+ years of combined experience across tax compliance, documentation standards, and complex coordination. That means we don’t just prepare a return – we build the working papers and support schedules that help estate filings hold up under scrutiny and reduce avoidable follow-up.
Support typically includes:
- T3 estate return preparation and review
- Reconciliation of estate accounts and investment activity
- Cost base support and documentation packages
- Real estate sale support (Toronto/GTA closings)
- Coordination with legal counsel and other advisors where needed
- CRA correspondence support if questions arise
Frequently Asked Questions: T3 Estate Returns (Toronto)
Who is responsible for filing the T3 estate return?
Typically, the executor or trustee is responsible for ensuring the estate’s trust filings are completed accurately and supported by proper documentation.
Do all estates need to file a T3?
Not always. Many do, especially if the estate earns income or has reportable activity after death. If the estate holds investments or property during administration, a T3 is common.
What if estate records are incomplete?
That’s very common. The best path is usually a structured clean-up: reconcile accounts, rebuild cost base where possible, and document assumptions so the filing is defensible.
Can you help if the estate is behind on filings?
Yes. We can help bring filings current, organize support schedules, and implement a smoother process going forward.
Do you provide legal advice?
We provide tax preparation, compliance, and documentation support. We have estate lawyers we work closely with that we can suggest, or we coordinate with your lawyer.
How do you price T3 estate return work?
Pricing is typically scoped based on the estate’s complexity, account volume, transactions (including real estate sales), investment activity, and the state of the records. Most engagements are quoted as a fixed fee with defined deliverables.
- For Canadian Estates & Trusts
T3 Estate Return Checklist
Use this checklist to gather documents before we prepare your T3 Trust Income Tax and Information Return. If you’re unsure about an item, include what you have, we’ll confirm what’s required.
Need Help Filing A T3 Estate Return In Toronto?
If you’re administering an estate in Toronto or anywhere in Canada and want the T3 done properly – with clear support and minimal back-and-forth – we can help.
