How does bankruptcy affect my return?

Even if you’ve declared bankruptcy in 2017, you still need to complete and file a tax return. The rules will be different however, depending on if you’re filing a federal tax return (with the Canada Revenue Agency (CRA)) and/or a Québec tax return (with Revenu Québec).

Click here if you’re filing a return with the CRA

Click here if you’re filing a return with Revenu Québec

What do I need to file?

If you’re filing a federal tax return, your trustee (the person acting as the administrator of your property and assets) will have to file a completed Form DC905, Bankruptcy Identification Form with the CRA before you can submit a bankruptcy return. Depending on your situation, you might be required to file one of 3 different types of bankruptcy returns:

  • Pre-bankruptcy return: Covers the period ranging from January 1 up to the day before the date of bankruptcy
  • In-bankruptcy return: Covers the period ranging from the date of bankruptcy to December 31, and reports the income you received from your liquidated assets (like your RRSPs) or from businesses that are wound down by your trustee for the benefit of your creditors, after you’ve filed for bankruptcy
  • Post-bankruptcy return: Covers the period ranging from the date of bankruptcy to December 31

Note: Unfortunately, H&R Block’s tax software doesn’t support bankruptcy returns – but that doesn’t mean you have to figure it out on your own! In the event of a bankruptcy, your trustee will look after completing and filing your pre-bankruptcy and in-bankruptcy returns for you.

In most cases, your trustee won’t file a post-bankruptcy return on your behalf. If you need a hand preparing this return, speak to one of our tax experts at the retail location closest to you – they’ll be happy to help! (fees will apply) 

I’m a resident of Québec. What are my obligations?

If you’re filing a Québec return, you’re required to file 2 income tax returns (TP-1-V):

  • the first, for the period ranging from January 1 to the day before your date of bankruptcy
  • the second, for the period ranging from the date of bankruptcy to December 31

If you declared bankruptcy in 2017, both of the returns mentioned above must be filed no later than April 30, 2018 (or June 15, 2018 if your spouse owns a business). For more information on tax obligations related to your bankruptcy, check out the Revenu Québec website.

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