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Archive for Canada

Canadian FAQ #203 – Lunch & Learn Program

Grant Gilmour

Tax Question:

What is the cost of asking tax questions? How can I avoid huge fees when I have a “simple” or “quick” question?

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Canadian FAQ #202 – Difference Between PST & GST

Grant Gilmour

Tax Question:

How does PST work and how is it different from GST?

Facts:

PST (Provincial Sales Tax) is a provincially-levied retail sales tax that is generally applied to goods or services acquired for personal use in British Columbia, unless there is a specific exemption.

GST (Goods and Services Tax) is a federally-levied value added consumption tax that is applied to the supply of most of the goods and services purchased in Canada.

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Canadians Selling U.S. Real Estate

Larry Stolberg

As you may be aware of there is a federal tax withholding requirement on the sale of U.S. real estate by non-U.S. persons. This does not exempt the vendor from filing a U.S. tax return to report the sale and paying any tax payable or requesting a refund for excess federal tax withholding.

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Small Business Inter-Corporate Dividends

Larry Stolberg

Revisions to Section 55 of the Income Tax Act (“ITA”) may prevent the tax-free payment of inter-corporate dividends within a related corporate group.

With the exception of Part IV tax where applicable, the related party exemption per S55(3)(a) will no longer be available to allow cash dividends say paid from Opco to Holdco unless there is safe income in the payor corporation at the time of the dividend payment.

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Canadian FAQ #201 – Types of Losses

Grant Gilmour

Tax Question:

Can I apply corporate losses against profits?

Facts:

When a corporation incurs a loss it can carry that loss back three years or forward a set number of years depending on the type of loss.

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Extended Filing Requirements For IRS Form 5472

L S 8.4

On May 23, 2016, Internal Revenue Bulletin 2016-21 was released which proposes amendments to the regulations governing IRC 6038A.

The regulations are proposed to be applicable for taxable years ending on or after the date that is 12 months after the date these regulations are published as final regulations in the Federal Register.

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Income From Business Or Property

Larry Stolberg

The taxation of corporate income from the rental of storage facilities appear to be a common business under regular review just like the motel/hotel and rental management business.

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International FAQ #23 – Place of Supply

Grant Gilmour

Tax Question:

What is “Place of Supply” and how does that apply to sales taxes?

Facts:

Sales taxes can be confusing. In particular supplying goods or services across a country, province or state border.

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Canadian FAQ #200 – Corporate Tax Filing Deadlines

Grant Gilmour

Tax Question:

When is my deadline to file my corporate tax return, and if I miss the deadline, what are the consequences?

Facts:

All companies have six months from the end of their fiscal year to file their T2 corporate tax return.

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CRA Forms Overlooked By Canadians Investing In U.S. Real Estate

Larry Stolberg

The T1134 and T1135 are a sample of Canadian foreign information returns such as the U.S. 8938, 5471, or 8865.

A number of Canadians are investing in the U.S. real estate market with a U.S. limited partnership, whose limited partners are solely Canadian residents and the general partner is a U.S. C corporation, whose shareholders are also Canadian residents.

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FBARs Blindsiding Canadians Present In The United States

Larry Stolberg

FINCEN114 due June 30th for the 2015 taxation year, reporting beneficial interest or signature authority in non-U.S. financial accounts where the annual aggregate highest balance is greater than $10K U.S., may have to be filed by Canadian taxpayers.

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Canadian FAQ #199 – Rental Income

GG 7.13

How do I ensure my rental income is active business income? Why would this be a good idea?

Facts:

Rental income falls under the definition of aggregate investment income in the Canada Income Tax Act. That means that it is not classified as active business income and does not qualify for the small business tax rate, resulting in higher tax rates on most rental income. Read more

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