TaxConnections


 

Archive for Canada

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

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

U.S. Expatriates RESP Reporting Issues in Canada

Larry Stolberg

U.S. citizens (or even green cardholders) resident in Canada who are contributors (or a joint contributor) to their children’s RESP (Registered Educational Savings Plan) may have U.S. reporting issues.

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Canadian FAQ #198 – Dividends vs Salary for 2016

Grant Gilmour

Is it better to take a dividend or salary for 2016?

Facts:

Owners and shareholders of a corporation have a choice to pay themselves either dividends or salary as part of their remuneration package.

The tax system in Canada is designed so that it should not matter how an individual earns their income as they should experience the same level of tax. However, the new changes to 2016 as part of the federal budget have increased the cost of dividends to the taxpayer.

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Sending Non-Canadian Resident Employees To Canada

Larry Stolberg

Regulation 102 of the Income Tax Act (ITA) requires payroll withholding on income derived by virtue of employment. This applies to, say, a U.S. employer sending its employee to Canada to work on an assignment. Withholding would include income tax and contributions to the Canada Pension Plan (CPP) and Employment Insurance (EI).

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Common And Costly Bookkeeping Mistakes

Grant Gilmour

Tax Question

 

What are common and costly mistakes made in corporate bookkeeping during the year and how can these be avoided?

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Canadian Court Case Showcases CRA Incompetence

Larry Stolberg

The Canadian Income Tax Act provides a time period in which one may appeal a Notice of Assessment (NOA) or Reassessment. It is not unusual for a taxpayer not to have received the NOA. Although the taxpayer should advise Canada Revenue Agency of any change in addresses or to correct an incorrect address on file, this case was decided on the premise of the lack of communication to the taxpayer of CRA’s assessment of tax payable for a taxation year.

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T1134 Information Return Relating To Controlled And Not-Controlled Foreign Affiliates

Grant Gilmour

If a Canadian corporation or individual has an interest in a foreign affiliate, whether controlled or not, it will need to complete a T1134 information return. The T1134 information return is broken into two forms, a summary and a supplement. A separate supplement must be filed for each foreign affiliate.

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