Joint bank account, one person passes away - who pays the taxes?

Was the bank notified of the death?

I would assume that if the income on the T5 is for the full calendar year, the it would be broken down: person A January-June, person A and B June-date of death, after date of death, then person B. Was the amount of interest a large amount? Was the investment contributed to equally? The latter is a factor.

However,if the amount is not huge, a few hundred dollars, I can't see that it would be a problem to assign it person A to date of death, person B the rest.

The bank was notified of the death.
There are actually two T5s, totaling $3k in interest.
All funds were in GICs, some in TFSA, the rest in taxable.

So I don't know if a T5 is normally issued every year, or if the interest has been accumulating for many years (since GICs were owned) and now T5s were issued because the accounts were closed.

(I edited OP to show more info)

Taxes are paid by the estate in Ontario.

Unless... The executor somehow liquidates all the money of the estate before paying all the taxes...

UrbanPoet wrote: ↑ Taxes are paid by the estate in Ontario.

Unless... The executor somehow liquidates all the money of the estate before paying all the taxes...

The complicating issue in OP's post is that the account (s) became joint before person A died.

The only change I would make to my reply, based on the additional info, is to determine when the interest applied to, and adjust the allocation of interest accordingly. So if one GIC was a 5 year investment ending in 2016, more of that interest would be reported by person a.

Hopefully someone else will advise on your post. Although I worked for CRA for many years, this wasn't my direct area of knowledge.

The CRA rule is that interest or other return-on-investment income for joint accounts is to be split proportionately to the original contribution to the account (e.g., see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs ... u-eng.html).

In your case it should be pretty simple:

- Up until June 2016 the account was only in the name of Person A, and all income earned is taxable to them (or their estate since they died)
- After June the account was jointly held, but the original contribution was all person A. Therefore any income earned post-June is also taxable to person A or their estate.
- After the death of person A in October, ownership of the account presumably passed to person B unless there's a will that says otherwise or ongoing probate. So post-October all income earned is taxable to person B.

You don't get to choose.