Quote:
Originally Posted by Raekwon
The banks hold it back? I understand the heavy taxation on it but was under the impression that it was up to the estate to do the taxes and not the bank to withhold the money. If the banks do it they must provide a slip of some sort for taxes?
Edit: Also possible that I'm thinking of beneficiary payments on RRSP and the bank not holding back taxes.
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Well that tax is on withdrawals in general and the institution (bank or otherwise) has to hold it back. It's just not an option.
They do provide a tax slip because those are taxes paid and go to offset the bill when that date arrives.
There are things you can do to defer those taxes. Spousal rollover is the most common, because it goes to a spouse with no taxes incurred, but also things like dependant children (which could be adults if they are disabled or things like that). But the reality is that you would have to make those elections before death.