Posts Categorized: Uncategorized

Income Splitting Tool: LOANS FOR VALUE

Special attribution rules prevent the shifting of income between certain related people (including a spouse, parent, grandparent, sibling, uncle or aunt). Consider the situation where high-earning Spouse A gives investments to low- earning Spouse B so that investment income can be taxed at Spouse B’s lower tax rate. The attribution rules prevent this by requiring… Read more »

Watch Out!: REAL ESTATE PROJECTS

General CRA activity Over the last few years, CRA has focused on purchases and sales within the real estate sector. They are reviewing transactions for several items, such as: – property flips on account of income; – ineligible principal residence claims; – commissions on sales; – pre-sale condo assignments; and – eligibility for the GST/HST… Read more »

Reimbursing Employees for Technology Costs: WORKING FROM HOME

In an April 14, 2020 French Technical Interpretation, CRA was asked whether amounts paid to an employee for costs of equipment for working remotely would be a taxable benefit. Generally, a reimbursement for a personal purchase of equipment used for working remotely would be a taxable benefit. However, CRA noted that in the context of… Read more »

TAX TICKLERS… some quick points to consider…

– As of August 9, 2020, the Government has approved 813,570 Canada Emergency Wage Subsidies (CEWS), with a total value exceeding $26 billion. – To estimate your CEWS entitlement, consider using the CEWS 2.0 Estimator at WageSubsidyCalculator.ca, or CRA’s more complete calculator at https://www.canada.ca/en/revenue- agency/services/subsidy/emergency-wage-subsidy.html. – The Government has launched a webpage, https://www.canada.ca/en/services/business/maintaining-your- business.html, to… Read more »

Making Them Valuable: UNCOLLECTIBLE ACCOUNTS

Tax Possibilities – Bad Debt Write-off As many businesses are struggling to collect outstanding amounts, it may be worthwhile to identify any receivables which have previously been included in income that can be written off as bad debts. This allows for a deductible expense to reduce taxes. A number of factors should be considered, including:… Read more »

Eligible Expenses: BUSINESS USE OF THE HOME

A November 27, 2019 French Tax Court of Canada case reviewed various deductions claimed against the taxpayer’s business income derived from engineering and arbitration services related to the business use of his home. The taxpayer and CRA had agreed that 35.83% of the home, mainly the basement which was used as a business office, was… Read more »

Home Office Expenses: WORKING FROM HOME DURING COVID-19

In order for home office expenses to be deductible against employment income, the employee must be required by contract to incur such expenses, and one of the following has to be met: The home is where the employee principally (more than 50% of the time) does their work. The employee uses the space exclusively to… Read more »

Tax Implications: CONTRIBUTIONS OF GOODS OR SERVICES TO AN NPO

In a January 6, 2020 Technical Interpretation, CRA considered whether a deduction was available to suppliers who contributed in-kind goods or services to an NPO with the expectation that they would benefit from word of mouth advertising and promotion.Where the supplier is providing goods or services to an NPO in exchange for advertising and/or promotional… Read more »

Taxable or not?: REAL ESTATE SALES

In general, gains are fully taxable where the taxpayer buys a property with the intention to sell for a profit (sold on “account of income”). In other cases, half the gain is taxable (sold on “account of capital”). When a sale on “account of capital” involves the sale of a principal residence, the tax may… Read more »