TaxConnections


 

Archive for Corporate

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.

Read more

How Many Times To Tax Business Income?

Annette Nellen

A recent post (8/26/16) on the Tax Justice website was titled – Why We Must Close The Pass-Through Loophole? That caught my attention as I was trying to think what the “loophole” might be? A loophole is a provision that can be used beyond its intended purpose because the rule is not written specifically enough. When a rule is being used as intended, it is not a loophole. For example, sometimes the mortgage interest deduction is called a loophole, but it is not. People deducting interest on the mortgages on their primary and vacation homes is using the rule as intended.

Read more

And Now, The Great IRS-Facebook Face-Off!

I am not sure, if I were asked to, which one I would put my money on in this battle. While both are mammoth forces to be reckoned with, social media giant Facebook might be smarter. However, the IRS has been indomitable for decades.

According to the IRS, Facebook owes them billions – roughly $3 to $5 billion!

Read more

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

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.

Read more

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?

Read more

Start-up And Organization Costs

John Stancil

When starting a business, the owners are likely to incur two classes of costs that are not normally encountered in the ongoing operations of the business and should not be included as operating expenses. These are start-up expenditures and organization costs. Each of these are specifically defined and receive special tax treatment.

Read more

Companies Looking to Acquire: Sales Tax Worries

Monika Miles

A couple of weeks ago we took a look at what controllers and CFOs need to think about prior to their company being acquired. But what if you are looking to acquire another business?

Read more

The Tax Implications Between New Vehicles—Class 10 And Class 10.1 Assets

Grant Gilmour

Any vehicle with a purchase cost of over $30,000 can be classed as a luxury vehicle (a 10.1 asset). This classification restricts the amount of depreciation that can be deducted from income which reduces your corporate expenses and increases your corporate tax. It also limits the amount of Goods and Service Tax (GST) that can be recovered. The determining factor is whether the vehicle is a passenger vehicle or a motor vehicle by Canada Revenue Agency’s definitions.

Read more

Companies Looking To Be Acquired: Why Worry About Sales Tax?

Monika Miles

Although it may not seem like sales tax has much to do with mergers and acquisitions, the truth is, many deals have fallen apart because of multistate sales tax issues. Controllers and CFOs who have seen the process first-hand know how messy the acquisition process can be – particularly if the target company’s multistate tax issues (especially sales taxes) haven’t been addressed.

Read more

Figuring Out The Best Corporate Year End Date

Grant Gilmour

The year end date is important as it identifies the end of a corporation’s business year and can have an impact on tax planning. It has to be determined for a corporation’s first tax filing and is typically the last day of a month.

So what year end date should you choose?

Read more

Calculating Multi-Jurisdictional Income Tax In Canadian Provinces

Grant Gilmour

If your company is a Canadian taxpayer, Canadian corporate tax is calculated by allocating taxable income between the provinces in which your company has a permanent establishment presence.

Discussion:

 

The company is considered to have a permanent establishment presence in any Canadian province where any of the following conditions are met:

  • A fixed place of business such as an office, branch, warehouse, workshop or factory in the province.
  • An agent or an employee present in the province.
  • The company owns land in the province.
  • There is substantial use of machinery or equipment by the company in the province.

Read more

TaxConnections