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 »

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 »

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 »

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 »

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 »

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 »

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 »

RRSP designations A May 10, 2021 CBC article demonstrated the importance of reviewing RRSP beneficiary designations. The article discussed the unfortunate cascade of events where, in 2018, a 50-year-old individual went to the hospital for stomach pain and was diagnosed with cancer. He passed away three weeks later, leaving a spouse and a child. It… Read more »

CRA recently sent out processing review letters in error to some taxpayers rather than their authorized representative. If you received a letter from CRA that appears unusual, please contact us.  A Court recently denied an individual’s travel expenses as no log was maintained in respect of the travel. The Court did not accept an estimate… Read more »

Individuals who contribute excess amounts into their TFSA are subject to a penalty tax of 1%/month on the excess amount for each month that the TFSA is overcontributed. However, CRA has the discretion to waive this penalty tax if the excess amount resulted from reasonable error and the excess contribution, plus any income or capital… Read more »