Hi, I am from Edmonton, Alberta, Canada.
My Aunt died in Manitoba in 2008.
She left me $10,000.00. Does the executor have to pay taxes on that? If so, does he take it out of my inheritance and thus lower my benefits?
Thanks for your reply.
Prior to distributing the estate to the heirs, the Executor has the responsiblity to pay for the funeral, all debts, probate, legal and accounting fees, outstanding income taxes etc. from the estate. Once everything has been paid the estate is distributed as per the instructions in the will. If the remaining funds are sufficient, you will receive your $10,000. Canada does not have an estate tax so you won't owe on the principal amount. However, if you invest it, you will be required to pay income tax on any income the investment generates.
I hope this helps.