An individual who acquired flow-through shares of a principal-business corporation (PBC) on February 1, 2013, entered into a flow-through share agreement in writing, and died on December 30, 213. What deductions and credits would be available in the deceased’s terminal return or to the estate?
[A] renunciation of CEE or CDE by a PBC to a particular person cannot take effect after the death of that person because the particular person ceases to exist at the time of death. In addition, and subject to subsection 66(12.66), a PBC cannot renounce any expenses that it has incurred on or before the date the renunciation takes effect.
For the purposes of the flow-through share regime described in the Act, the estate of a deceased person and the beneficiaries of the estate cannot be considered as the same person as the deceased. The PBC cannot, therefore, renounce CEE or CDE to them in respect of the PBC flow-through shares acquired by the deceased who had entered into an agreement with that PBC for such flow-through shares. As a result, the estate or beneficiaries of the estate will not be entitled to any deduction or credit in respect of the flow-through shares.