Davidow & Nelson Blog

Tax Tidbits

Some quick points to consider… – CRA has produced various basic tax education and literacy tools, such as seven learning modules with videos and quizzes. – As of January 1, 2024, where more than five information returns of a particular type (such as T4s, T5s, T3s, T4As, NR4s and T5018s) are filed on paper (as… Read more »

Recordkeeping: Cryptocurrency Exchange Cessation

A June 7, 2023 CryptoTaxLawyer.com article (Binance Bids Canada Bye-Bye! Canadian Tax Implications for Cryptocurrency Investors and Traders) reminded Canadians about the importance of maintaining an offline record of transactions as exchanges, such as Binance, shut down in Canada. On May 12, 2023, Binance announced that Canadian users will be required to close any open positions by September 30, 2023. Once… Read more »

A New Investment Tool: First Home Savings Account (FHSA)

The tax-free FHSA was introduced in 2023 to help first-time home buyers save up to $40,000 for a home purchase. Individuals eligible to open an FHSA must be at least 18 years of age and resident in Canada. The individual must also have not lived in a home that they or their spouse owned jointly or otherwise at any… Read more »

Higher Contributions and Higher Benefits: CPP Enhancements

In 2019, the government commenced a two-part enhancement to the Canada Pension Plan (CPP), with full implementation to be completed in 2025. Phase 1 occurred from 2019-2023; phase 2 will occur from 2024-2025. Overall, the changes will require larger contributions but also will provide larger benefits. Pre-CPP enhancement CPP contributions for employees and employers under the pre-enhancement CPP model (referred to as base… Read more »

Some Challenges: Employee Time Theft

A January 11, 2023 BC Civil Resolution Tribunal case addressed a claim for wrongful dismissal. The employer filed a counterclaim in respect of a 50-hour discrepancy between the employee’s timesheets and tracking software data over a period of about a month during which the employee was working remotely. The employee argued that significant hours were spent working from hard copies; however,… Read more »

Tax Tidbits

Some quick points to consider… – Most CPP retirement, disability, survivor and child benefits can only be paid retroactively for up to 11 months after applying. Make sure to apply on time to avoid losing access to benefits. – The Canada Disability Benefit Act, which received Royal Assent on June 23, 2023, is intended to provide financial security… Read more »

Many Business Transfers Coming Shortly: Small Business Succession

The Canadian Federation of Independent Businesses (CFIB) released a report on January 10, 2023, focused on succession expectations for small businesses. It included the following survey responses: 76% of small business owners (constituting $2 trillion in business value) are planning to exit their business in the next 10 years;  9% have a formal business succession plan in place;  obstacles to… Read more »

Sponsorship: Employment Expenses for Commissioned Employee

In a January 23, 2023 French Court of Quebec case, a commissioned salesperson deducted nearly $600,000 over 2015 and 2016, in sponsorship expenses of a professional cycling team in Canada. The individual was an investment advisor and reported commission income of $1,493,910 and $1,263,360 and taxable capital gains of $2,276,374 and $99,767 in the respective years. The taxpayer argued that the… Read more »

CRA Policy: Unreported Capital Trades Included on a T5008

Traders or dealers in securities must report to CRA the disposition of securities, such as publicly traded shares, mutual fund units, bonds and T-bills, of their clients on a T5008. A November 4, 2022 French Federal Court case summarized CRA’s administrative policy where a taxpayer has not filed a tax return, but a T5008 was issued, reporting the disposition of… Read more »

Carrying on a Business Within It: TFSA

Earnings in a TFSA are typically not taxable. However, earnings in a TFSA become taxable when they are earned from carrying on a securities trading business. In a February 6, 2023 Tax Court of Canada case, CRA had assessed the TFSA on the basis that it was carrying on a business and was therefore taxable on its income for… Read more »