Income Tax Act — I-3.3 104
dividual’s death occurs on a day in a particular taxation year of a trust and the death is the death or later death, as the case may be, referred to in paragraph (4)(a), (a.1) or (a.4) in respect of the trust, (a) the particular year is deemed to end at the end of that day, a new taxation year of the trust is deemed to begin immediately after that day and, for the purpose of determining the trust’s fiscal period after the new taxation year began, the trust is deemed not to have established a fiscal period before the new taxation year began; (b) subject to paragraph (b.1), the trust’s income (determined without reference to subsections (6) and (12)) for the particular year is, notwithstanding subsection (24), deemed (i) to have become payable in the year to the individual, and (ii) not (A) to have become payable to another beneficiary, or (B) to be included under subsection 105(2) in computing the individual’s income; (b.1) paragraph (b) does not apply in respect of the trust for the particular year, unless (i) the individual is resident in Canada immediately before the death, (ii) the trust is, immediately before the death, a testamentary trust that (A) is a post-1971 spousal or common-law partner trust, and (B) was created by the will of a taxpayer who died before 2017, and (iii) an election — made jointly between the trust and the legal representative administering the individual’s graduated rate estate in prescribed form — that paragraph (b) applies is filed with (A) the individual’s return of income under this Part for the individual’s year, and (B) the trust’s return of income under this Part for the particular year; and (c) in respect of the particular year (i) the references in paragraph 150(1)(c) to “year” and in subparagraph (a)(ii) of the definition balance-due day in subsection 248(1) to “taxation year” are to be read as “calendar year in which the taxation year ends”, and (ii) the reference in subsection 204(2) of the Income Tax Regulations to “end of the taxation year” is to be read as “end of the calendar year in which the taxation year ends”. Election by trust and preferred beneficiary (14) Where a trust and a preferred beneficiary under the trust for a particular taxation year of the trust jointly so elect in respect of the particular year in prescribed manner, such part of the accumulating income of the trust for the particular year as is designated in the election, not exceeding the allocable amount for the preferred beneficiary in respect of the trust for the particular year, shall be included in computing the income of the preferred beneficiary for the beneficiary’s taxation year in which the particular year ended and shall not be included in computing the income of any beneficiary of the trust for a subsequent taxation year. (14.01) to (14.1) [Repealed, 2014, c. 39, s. 26] Allocable amount for preferred beneficiary (15) For the purpose of subsection 104(14), the allocable amount for a preferred beneficiary under a trust in respect of the trust for a taxation year is (a) where the trust is an alter ego trust, a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust described in the definition pre-1972 spousal trust in subsection 108(1) at the end of the year and a beneficiary, referred to in paragraph (4)(a) or in that definition, is alive at the end of the year, an amount equal to (i) if the preferred beneficiary is a beneficiary so referred to, the trust’s accumulating income for the year, and (ii) in any other case, nil; (b) where paragraph (a) does not apply and the preferred beneficiary’s interest in the trust is not solely contingent on the death of another beneficiary who has a capital interest in the trust and who does not have an income interest in the trust, the trust’s accumulating income for the year; and (c) in any other case, nil. SIFT deemed dividend (16) If an amount (in this subsection and section 122 referred to as the trust’s “non-deductible