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Reporting Trust fund income (T5)?

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#1 Howitzer

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Posted 27 February 2013 - 11:37 PM

I have battled this issue for a few years now and I still don't know how I claim this amount.

 

Both of my sons (both under 10 years old) have trust funds (in a GIC) that they have gained interest on for the last three years.  We receive two T5's  "Statement of Investment Income" that tells us in box 13 "Interest from Canadian Sources" an amount, in trust for our boys.  I have called the CRA about it and one agent says that my wife and I have to claim these T5's on our returns, yet another agent claims that my sons claim the amount.  

 

Do I state in uFile that my boys have income to declare and then list the T5 in their returns??  Does this make sense what I'm asking?

 

It makes no sense that my wife and I claim income for our boys that we have not received any $$ from as yet (and we will never get, our boys will)... in the end our boys will get the money from their trust funds and my wife and I will have to pay the tax on their interest each tax year?? huh?


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#2 Howitzer

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Posted 28 February 2013 - 11:18 PM

I want to make sure that I enter this correctly into UFile...

 

Anyone have any advice on this?



#3 overtaxed58

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Posted 05 March 2013 - 07:24 AM

It depends on where the trust money comes from and who has ultimate control over it. See here:

 

http://www.cga-canad...axstrategy.aspx

 

If this is an inheritence and the money will be theirs when they become adults, then it's the boys own income. You would indeed add that to their own income. If this is a trust that you set up and maintain, then the income is actually attributed to you. As the link above says, this is part of the CRA's attribtuion rules to avoid abusive income splitting. 



#4 Howitzer

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Posted 05 March 2013 - 04:49 PM

Our boy's trust funds are an inheritance from their late aunt that they can collect when they turn 18.  My wife and I cannot touch the principle or the interest, and the trustee asks for a report on the trust funds annually.

 

So I should enter both T5's in each of the corresponding boy's incomes within UFile?  It looks like I should do it this way...



#5 overtaxed58

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Posted 06 March 2013 - 06:59 AM

Yes, that's correct.







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