In 2013-0513191E5, the CRA responded to four questions regarding the responsibility and liability of an executor in a situation where the deceased taxpayer was the sole director and shareholder of a corporation. The four questions were:
- Is an executor required under the ITA to file T2 returns for the corporation of which the deceased was a sole shareholder and director?
- Can the CRA make the deceased taxpayer liable for the debts owed by the corporation?
- If so, could the executor object to this?
- If the deceased taxpayer could be held liable, could the executor be similarly held so?
The CRA responded:
- Yes, under sections 227.1 and 160, as examples.
- Yes, the executor could challenge the assessment.
- If the executor does not obtain a clearance certificate when distributions are made, he or she could be liable.