Davidow & Nelson Blog

CRA Reviews: Money Received from Abroad

As of 2015, financial institutions must report electronic fund transfers (EFT) into Canada of $10,000 or more not only to FINTRAC but also to CRA. Where two or more EFTs of less than $10,000 each are made within 24 consecutive hours by or on behalf of the same individual or entity, and the total is… Read more »

Grants, Loans and Professional Assistance: Digital Adoption Program

On March 3, 2022, the Canada Digital Adoption Program (CDAP) was launched and opened for application. This $4 billion program provides funding through two initiatives. Grow Your Business Online Initiative This initiative provides $2,400 micro-grants and access to e- commerce advisors to help applicants adopt digital technology. Grants can cover costs such as website development,… Read more »

Audit File Selection and Assessment: Estimated Sales by CRA

In an attempt to identify unreported revenue, CRA and Revenu Québec may compare a business’ reported revenue to what would be expected given the business’ level of purchases. The analysis is based on industry-specific profit and revenue ratios. In a January 31, 2022 French Court of Quebec case, Revenu Québec had assessed QST on additional… Read more »

Eligibility Verification: CERB/CRB

Over the last year, CRA has increased verification activity in respect of eligibility for the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB). As a result, a number of disputes have hit the judicial system. One of the focus areas has been the prior earnings test. To be eligible for either CERB… Read more »

CRA Project: Principal Residence Exemption

In early 2022, CRA began to send out education letters in respect of individuals claiming the principal residence exemption (PRE) in the British Columbia region. Often, regional projects such as this are used as pilots for subsequent national projects. As CRA has indicated that they have a larger overall focus on real estate transactions, similar… Read more »

Budget 2022 Proposals: Buying and Selling a Home

The 2022 Federal Budget included several proposals that would significantly change the taxation environment when buying and selling a home. Broadly, the government proposed various incentives for first-time buyers and extended family units in addition to bright-line tests/restrictions for those purchasing homes for profit (e.g. home flippers). Taxpayers should consider how the changes will affect… Read more »

Tax Tidbits

Some quick points to consider… – The luxury tax affecting new vehicles and aircraft retailing for more than $100,000 and new boats over $250,000 has been rescheduled to commence on September 1, 2022. – The Office of the Auditor General of Canada noted that $3.7 billion of overpaid COVID-19 benefits had been identified. – The… Read more »

Clawback Planning: Old Age Security (OAS)

Individuals who normally receive OAS are occasionally surprised when some OAS is subject to a special tax (commonly referred to as a “clawback”) with their T1 tax filings due to high earnings. In particular, OAS is clawed back at a rate of 15% of adjusted income (AI) received in that year over an indexed threshold… Read more »

Modified Support for Individuals: Canada Worker Lockdown Benefit (CWLB)

The CWLB provides a $300 per week benefit to employees and self-employed persons unable to work due to a public health restriction lasting at least seven consecutive days. It will apply only to regions designated by the federal government as eligible in the period. This would be in regions where provincial or territorial governments have… Read more »

Expanded Access to Tax Credit: Teachers and Early Childhood Educators

The eligible educator school supply tax credit is a refundable tax credit that allows teachers and early childhood educators to claim up to $1,000 for amounts expended (for which no allowance or reimbursement was provided) for supplies and some durable goods used to teach or facilitate students’ learning. Individuals must have a certificate from their… Read more »