A very quiet and painful spring 2020 comes to an end in BC. As the BC economy reopens pieces at a time, the impact of the Vancouver covid-19 pandemic lockdown on different sectors of the economy will become more evident. For young or mature business owners, this past spring was a time of inner reflection. There was plenty time for planning, whether to acquire existing business to bolster one’s market share or exit an existing business and spend more time pursuing activities that are ... Read More
With the curve flattening in BC, I am going to practice optimism and leap back to the future to discuss tax planning for BC individuals and small businesses for the 2020 year end.
Operating loss utilizationThere will be businesses with operating losses for this fiscal year. Losses can be carried back three years whether you are proprietor or an incorporated business. Note that many of the financial assistance received under the Canada Emergency Response Plan for ... Read More
BC is now three weeks into the social distancing protocol. It is becoming more obvious that the distancing will go on for another month if not longer. With this acknowledgement, the financial cost of this pandemic will reach financial crisis level when said and done. I am already reading about long existing local brands closing their doors just three weeks into the social distancing. Some businesses are likely closing down strategically. After all, if we are ... Read More
In a recent blog, I explained why a CCPC shareholder is better off holding real estate investment or any passive investment in a CCPC versus personally. Those who are familiar with recent changes to CCPC tax laws will note that there is a $ 50,000 investment income ceiling, after which for every $ 1 additional investment income dollar will claw back the SBD by $ 5. Hence, once investment income reaches $ 150,000, the entire SBD will be eliminated. In other words, there is no income that ... Read More
Difference Between Real Estate Development and Real Estate InvestmentThere is much confusion on the tax efficient way to hold real estate. The confusion is because taxpayers confuse real estate development with real estate investment. If a taxpayer is planning to buy a piece of land and build a new house or substantially renovate an existing house, this is real estate development, NOT real estate “investment”. The distinction is very important because the tax treatment of the ... Read More
During the summer of 2017, CCPC shareholders and tax advisors across Canada were surprised with by the announcement of new tax rules and restrictions that were being planned by the Minister of Finance. Basically, Ottawa felt that the existing rules at the time were too generous for the CCPC shareholders and intended to scale the “tax perks” down considerably. Almost two years later and with much drama during the interim, the new tax regime is now in place and time will tell how much extra ... 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
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