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T3 Beneficiary Worksheet and T3Ben

Updated: 2021-09-29

In TaxCycle, much of the T3 Trust return is similar to a T1 personal tax return. Many of the forms look and behave the same. However, one area that is unique to TaxCycle T3 (and likely different from your old tax software) is the flexibility you have in entering beneficiary information and in allocating income to beneficiaries.

Beneficiary Information

Enter name and contact information for beneficiaries on any of the following worksheets or slips. Information flows automatically between them:

  • Beneficiary worksheet
  • Allocation worksheet
  • Individual T3Ben slips that will be distributed to beneficiaries

The type of information available on each form differs slightly. The Beneficiary worksheet provides fields to enter the address and contact information, as does the T3Ben slip. The Allocation worksheet only allows entry and editing of the name of the beneficiary. If you spot a typo or change your mind about a piece of beneficiary information, you don't need to chase down the source field. Make the change where and when you see it.

Allocation on the T3Ben

  1. If on the Allocation worksheet, you select one of the options to allocate by a Fraction share or Specific amount, you can you edit these amounts directly on each beneficiary's T3Ben. Data in these fields is with the Allocation worksheet.
  2. If you select 5. Manually allocate each type of income directly on the T3Ben on the Allocation worksheet, you can allocate an amount in the table at the bottom of the T3Ben slip.

Screen Capture: Allocation Section on T3Ben

Preferred Beneficiary Election

The Preferred Beneficiary Election is available per ITA 104(14) to a beneficiary of a trust who meets the definition of a “preferred beneficiary” as defined in ITA 108(1). This allows the Trust and the Preferred Beneficiary to elect jointly, as prescribed by section 2800 of the Income Tax Regulations, to designate a portion of the Trust’s Accumulating Income to be taxed in the hands of the Preferred Beneficiary for the taxation year.

To designate a preferred beneficiary:

  1. On the T3Ben, answer Yes to the Preferred beneficiary question.
  2. New T3PreferredBen worksheet for the beneficiary. This worksheet appears in the Filing & Authorization category in the Prepare sidebar.
  3. Complete beneficiary information related to the election on the T3PreferredBen.
  4. TaxCycle automatically calculates the amounts related to the election on the worksheet.

Screen Capture: Triggering the T3PreferredBen