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.
Vancouver Sale of Rental Property and the Principal Residence Exemption
While at dinner recently, a friend of mine, Carla, informed me that she sold her rental property and was curious about the amount of tax that she would owe on the gain. Upon further questioning, I uncovered that, in the past, my friend had lived in this rental property (a condo) for many years. She purchased a second condo a few years back and moved into it. She had then rented out the first condo—the one she just sold. From her line of questioning, I realized that, other than the tax ... Read More
Vancouver Tax Considerations for Buying a Business in British Columbia
If you are in the initial stage of negotiating the purchase of an incorporated business in British Columbia (B.C.), this is a good time to consider the method you choose to go about the acquisition. There are two methods to acquire a business: you either buy the desired assets of the company, or you buy the shares of the company. Each method has different business tax consequences for the seller and the purchaser, so knowledge of the different tax treatments can provide the purchaser with room ... Read More
Vancouver Business Tax Audit – When CRA Comes Knocking
If your Vancouver business receives a letter from the CRA (Canadian Revenue Agency) asking for documentation to support an HST or corporate tax return, it is not a good idea to deal with the matter on your own. Hire a Vancouver chartered accountant to represent you during the business tax audit. First of all, CRA auditors are accountants. When they request information, they basically expect to see accounting information, not a lengthy verbal explanation on why your HST return for this year is ... Read More
Vancouver Corporate Reorganization and Tax Planning
Corporate reorganization involving the exchange of shares is a very powerful and versatile tax planning tool. The simplest and most common corporate reorganization method involves the shareholder of a corporation exchanging all of his/her shares in one class of existing shares, for shares of another authorized class. The primary focus of the share exchange is the “freezing” of the current fair market value of the shares given up by the shareholder, who is referred to as the "transferor". In ... Read More
Traits of Successful Vancouver Business Owners
As a tax advisor to small businesses in the Greater Vancouver area, I have worked with many different personalities over the past 15 years. However, a handful of my clients, over the last 10 years, have grown so rapidly that I am in awe when we meet for the year end work. This is because their successes are not necessarily due to the unique industry in which their business operates. This blog post outlines my observations of the decisions these businesses have made consistently over the year in ... Read More
Tax Planning for Canadian Self-Employed Businesses: A Tool
Tax Planning for Canadian Self-Employed Businesses
A tax organizer is there to assist Canadian self-employed taxpayers organize their financial information at tax time. Reading and following CRA guidelines can be a daunting task when you are already overwhelmed with the amount of receipts in your hand. The organizer also helps remind the tax filer of the most common tax receipts to forward to their tax advisor and the most common deductions to consider. The business income and expense ... Read MoreTax Tips for Canadian-owned Corporations
Canadian-owned corporations are common business structures in British Columbia and Canada as a whole. They come with a host of different structuring options and different methods of compensation (i.e. dividends vs. salaries). The following are a few simple business and tax tips for Canadian-owned corporations: Make your spouse a shareholder of the company as well. This will allow income splitting, flexibility in tax planning, and will help multiply future capital gains deductions. Consider ... Read More
Canadian Corporate Tax Planning: On Investing Retained Earnings
What should I do with my Corporate Retained Earnings? As a Vancouver tax advisor to small, privately held Canadian corporations, many of my new clients are often unaware of all the investment options and tax benefits of investing their hard-earned corporate retained earnings. The small business corporate tax rate is only 13.5% on the first $500,000 of profits. That is incredibly low. A successful and diligent business can accumulate retained earnings quickly within this tax ... Read More
