12 Tax Rules and Real Estate Gain from sale of principal residence not taxable. Loss from sale of your principal residence not tax deductible. Sale of principal residence must be reported on the personal tax return. If a taxpayer owns more than one home for personal use and/or investment purpose, professional advisor should be consulted for optimal principal residence planning. The rules are complicated. Loss from sale of your real estate investment is considered a capital loss ... Read More
There is a trend taking place in the last twelve months. The number of CRA reviews that I am dealing with have increased noticeably. Many of these reviews are not for an earth shattering amount of GST or income taxes being reviewed. They are what I would call random audits to see if the taxpayers randomly chosen are being honest and then extrapolate from there.
Lack Of Experienced CRA Reviews Are Costing Taxpayers MoneyWhat I am noticing is the initial CRA contact person who ... Read More
More small businesses are now on cloud account software. Many business owners are performing the bookkeeping functions on their own and just as many business owners hire a bookkeeping firm who specializes in cloud software to do the bookkeeping. Now, AI is getting involved to limit human coding errors that still exist with cloud software. As for me, the external accountant, I have noticed considerable improvement with both, the software and the users maximizing the software full ... Read More
Many mature businesses have endured this at least once during their life time – a CRA tax audit. Most businesses survive an audit with no issue. This happens when the business has an adequate set of financial records that is easy for the CRA auditor to examine. So what makes up an adequate set of financial records. First of all, the CRA audit has changed from twenty years ago. In the past, an actual person came to the business premise to examine the books and records. Hence if the ... Read More
Just two years back, when buying condo presales was the rage of investing free cash in Vancouver, I wrote a short blog cautioning investors to begin preparation years ahead for the closing date of the deal. When the condo completes, full payment of the balance on the condo is required to close the deal; hence qualifying for the mortgage at that future time required some income reporting planning. Back then, waiting for construction completion date to close the deal was not necessarily part ... Read More
As 2018 comes to an end, tax advisors across Canada are busy restructuring and planning many corporations to respond to the new tax rules that came into existence this year.
BC's New Tax Law Called Tax on Split Income (TOSI)The biggest new tax law introduced this year is Tax on Split Income or TOSI for short. TOSI is so complicated that many tax advisors use a flowchart to visually follow the rules to assist in determining where the taxpayer stands with this rule this year. As ... Read More
Non-Canadian residents who own Canadian real estate and collecting rental income have two ways to deal with the Canadian tax liability.The first method is remit to the CRA, 25% tax on the gross rent collected. This 25% is due to the CRA on the 15th of the following month the rental income was credited to the non-Canadian resident. This tax is considered the final tax liability on the rental income and the non-Canadian resident has no further obligation. However, the non-resident ... Read More
Death of a family member is one of the most stressful events in life. To compound the grief, there are final tax matters to deal with either by April 30th of the following year or 6 months after the date of death.
What To Do Upon The Death of a Taxpayer?Upon the death of a taxpayer, at a minimum, there is a final return (“terminal return”) to be filed with the CRA and three optional returns to be filed if desired. In addition, a trust return to report income received after death is ... Read More
As the summer of 2018 comes to an end, vancouver tax advisors are starting to contemplate the tax planning work that will be required for CCPC come fall 2018. At the start of 2018, tax advisors and incorporated businesses awaited the 2018 federal budget with high level of anxiety. After all, the initial announcement to eliminate the tax deferral advantage that a CCPC enjoyed using its after-tax business income to earn passive income was severely punitive. As time passed and Ottawa responded ... Read More
2017 has been a year of drama for Vancouver tax advisors and I am happy that it is coming to an end. I have to admit, it is not so much January 1, 2018 I am looking forward to. I am anxiously waiting for the 2018 budget date which may bring all Canadian private corporations more clarity on their financial and tax future. Vancouver Tax Planning - Changes For Private Coporations On July 18, 2017, Ottawa proposed dramatic changes to the taxation of private corporations. Since then, Ottawa has ... Read More