The definition of a principal residence limits the amount of land that qualifies for the principal residence exemption to half a hectare unless the taxpayer establishes that the excess land was necessary for the use and enjoyment of the housing unit as a residence. In a January 28, 2022 Technical Interpretation, CRA reiterated that it is a question of fact… Read more »

A June 21, 2022 Tax Court of Canada case considered whether motor vehicle costs of $1,642 associated with a construction foreman’s travel between home and various job sites were deductible against employment income. The taxpayer worked on many of his employer’s 50 projects, located at numerous construction sites. The taxpayer was responsible for ensuring that the workers were in place each… Read more »

In a June 21, 2022 French Tax Court of Canada case, CRA assessed the taxpayer’s poker winnings from 2010 to 2012 as business income. In 2010, the taxpayer won almost $9 million in the No Limit Hold’em Championship (The Main Event) at the World Series of Poker. His net winnings that year were about $5 million. In 2011 and… Read more »

Some quick points to consider… – On June 19, 2022, individuals suffering from Type 1 diabetes became automatically entitled to the disability tax credit. This change is retroactive to 2021. – The Tax Gap, which measures the difference between what is actually collected and the taxes that would be paid if all obligations were fully met, is between $18.1… Read more »

As of 2015, financial institutions must report electronic fund transfers (EFT) into Canada of $10,000 or more not only to FINTRAC but also to CRA. Where two or more EFTs of less than $10,000 each are made within 24 consecutive hours by or on behalf of the same individual or entity, and the total is… Read more »

On March 3, 2022, the Canada Digital Adoption Program (CDAP) was launched and opened for application. This $4 billion program provides funding through two initiatives. Grow Your Business Online Initiative This initiative provides $2,400 micro-grants and access to e- commerce advisors to help applicants adopt digital technology. Grants can cover costs such as website development,… Read more »

In an attempt to identify unreported revenue, CRA and Revenu Québec may compare a business’ reported revenue to what would be expected given the business’ level of purchases. The analysis is based on industry-specific profit and revenue ratios. In a January 31, 2022 French Court of Quebec case, Revenu Québec had assessed QST on additional… Read more »

Over the last year, CRA has increased verification activity in respect of eligibility for the Canada Emergency Response Benefit (CERB) and the Canada Recovery Benefit (CRB). As a result, a number of disputes have hit the judicial system. One of the focus areas has been the prior earnings test. To be eligible for either CERB… Read more »

In early 2022, CRA began to send out education letters in respect of individuals claiming the principal residence exemption (PRE) in the British Columbia region. Often, regional projects such as this are used as pilots for subsequent national projects. As CRA has indicated that they have a larger overall focus on real estate transactions, similar… Read more »

The 2022 Federal Budget included several proposals that would significantly change the taxation environment when buying and selling a home. Broadly, the government proposed various incentives for first-time buyers and extended family units in addition to bright-line tests/restrictions for those purchasing homes for profit (e.g. home flippers). Taxpayers should consider how the changes will affect… Read more »