Davidow & Nelson Blog

Could Your Business Benefit? : Small Business Air Quality Improvement Tax Credit

The December 14, 2021 Economic and Fiscal Update proposed a temporary refundable small businesses air quality improvement tax credit of 25% on eligible air quality improvement expenses incurred by small businesses to make ventilation and air filtration systems safer and healthier. The credit will be available for qualifying expenditures between September 1, 2021 and December… Read more »

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 »