Davidow & Nelson Blog

Tax Tidbits

Some quick points to consider… – The annual TFSA limit for 2022 remains at $6,000. As such, if an individual has never contributed and has built room since the program’s inception in 2009, up to $81,500 can be contributed. – Employees working from home in 2021 due to the COVID-19 pandemic will again have the… Read more »

CRA Reviews: WORKSPACE IN HOME CLAIMS

For the 2020 year, many employees were required to work from home due to the COVID-19 pandemic. Those employees generally had two deduction possibilities: using the flat method of claiming $2/day the individual worked from home, or doing a detailed calculation to claim the actual costs associated with working from home. While the first option… Read more »

Flexible Planning Possibilities: WITHDRAWING FROM FAMILY RESPs

A July 21, 2021 Money Sense article (My three kids chose different educational paths. How do I withdraw RESP funds in a way that’s fair to them and avoids unnecessary taxes?, Allan Norman) considered some possibilities and strategies to discuss when withdrawing funds from a single RESP when children have different financial needs for their… Read more »

Pitfalls and Possibilities: HOLDING DIGITAL ASSETS IN RRSPs

Recently, individuals have become more interested in investing in digital assets such as cryptocurrencies (Bitcoin, Ethereum, Dash etc.); cryptocurrency liquidity mining and yield farming; and non-fungible tokens (NFTs). The next question often asked is whether such items can be held in tax-advantaged accounts such as an RRSP. An RRSP’s tax-preferred treatment only extends to “qualified… Read more »

Using Tracking Shares: LIFE INSURANCE POLICIES

When a shareholder passes away, their shares are deemed to be disposed of at fair market value (FMV) unless a tax-free rollover is available and used. This can cause a tax liability at a time when no cash is available. Holding a life insurance policy in the corporation in respect of the owner-manager can fund… Read more »

Properly Resigning: DIRECTOR LIABILITY

Directors can be personally liable for unremitted employee source deductions and GST/HST unless they exercise due diligence to prevent failure to remit these amounts on a timely basis. CRA cannot personally assess the director more than two years after the individual properly resigns as a director. In an August 11, 2021 Tax Court of Canada… Read more »

GST/HST Issues: PROVIDING SUPPLIES TO YOUR CONTRACTORS

In a July 29, 2021 Tax Court of Canada case, a trucking company (the taxpayer) engaged the services of a number of drivers as independent contractors (ICs). The taxpayer provided the vehicles along with a fuel card (that would cover all fueling costs). However, since the contract stipulated that the ICs were responsible for the… Read more »

Amounts Paid Must be Traceable: SALARIES TO FAMILY MEMBERS

Oftentimes, family members of the owner of a business will work for the business. However, these arrangements can be somewhat informal, and amounts paid may be denied as a business expense if the work performed and amounts paid to the worker are not properly documented. A June 10, 2021 Court of Quebec case provides one… Read more »

Starting the Transition Early: ENHANCING THE VALUE OF OWNER-MANAGED BUSINESS

Many owner-managers are shocked at both the difficulties in finding a buyer for their business and the low prices an owner-managed business often commands. A recent Intelligent Work article (How Does 10x-ing Value Work in an Owner-Managed Business?, John Mill) discussed guidance provided to Harvard MBA students regarding investing in owner-managed businesses. That guidance included… Read more »

Who is it?: CRA OR SCAMMER

Most, if not all of us, have received a call from someone claiming to be from CRA. They may threaten arrest or other such actions if a tax bill is not immediately paid via iTunes or Bitcoin, for example. While some of these calls have become easier to identify as fraudulent, scamming techniques and systems… Read more »