During the development phase or period of construction, there are many costs that are incurred. The majority of these expenditures are added to the capital cost of property or to the cost of inventory.

Soft costs do not have to be capitalized once the construction is complete or on the day that the building is substantially (at least 90%) used for its intended purpose. An occupancy certificate or completion certificate issued by the municipal building department is sufficient evidence that construction is complete. Read More

After a property is purchased, there is generally a time period that a property is held before it is developed. Common expenses that are incurred are property taxes and interest. Other expenses incurred can be classified as an operating expense, added to inventory cost or capitalized for tax purposes.

Property taxes and interest on vacant land are generally capitalized or added to the cost of inventory for real estate. These expenses on vacant land can only be deducted in the same tax year if there is property income received and the corporation is not in the business of development. Read More

Living and working abroad comes with many exciting benefits. In addition to exploring new lands and learning about new cultures, expats often earn additional income beyond just their regular salary. Foreign earned income can come in many forms. In addition to the wages that are earned, those who are working outside the United States also must declare as income bonuses, tips, commissions, and the like.

It is also common for expats working overseas to have non-cash income as part of their employment package.
Read More

Living and working abroad comes with many exciting benefits. In addition to exploring new lands and learning about new cultures, expats often earn additional income beyond just their regular salary. Foreign earned income can come in many forms. In addition to the wages that are earned, those who are working outside the United States also must declare as income bonuses, tips, commissions, and the like.
It is also common for expats working overseas to have non-cash income as part of their employment package.

Read More

A company is considered to have immigrated to Canada if the corporation’s central management and control has moved to Canada, regardless if initially incorporated in Canada or not. Therefore, when a business owner moves to Canada, so does the business.

When the company enters Canada, the company is deemed to have disposed of and reacquired all of the company’s assets and liabilities at their fair market value (FMV) right before coming to Canada. As the assets and liabilities of the company are being re-valued at the FMV, this is considered to be the company’s valuation date. Read More

Non-resident corporations that have no activity in Canada during its fiscal year are not required to file a Canadian corporate tax return. However, without filing a Canadian corporate tax return, the Canada Revenue Agency (CRA) will not know that you did not have activity in Canada. Therefore, CRA may send you a letter requesting that a return is required to be filed.

If CRA requests that a return be filed, even though your company had no activity in Canada, you may be tempted to file a return in order to be in compliance. Read More

Even if you have left the United States for a brighter future elsewhere, you  (something not as strong) take a moment and think about any obligations you have towards the IRS. The US retains its right to tax globally its citizens and resident aliens who are a citizen or national of a country with which the United States has an income tax treaty in effect. Only two countries have such a citizenship-based taxation system: the United States and Eritrea.

What Is A Foreign Earned Income Exclusion For U.S. Expats?

The Foreign Earned Income Exclusion (FEIE) is offered to US citizens and resident aliens that are living abroad on a consistent basis, have earned income in a foreign country and can prove that they have done so for the past tax year by satisfying either the Physical Presence Test or the Bona Fide Residence. Read More

What Are The Important Updates One Needs To Know About U.S. Tax Reform?

The New Tax Bill “Tax Cuts and Jobs Act” presents the first major overhaul of the United States federal income tax system in more than three decades. The major benefits will be mostly felt by the large and small businesses. But what’s about tax reform’s impact on Americans overseas?

What Has NOT Changed For Americans Overseas?

  1. You can still use Foreign Earned Income Exclusion or Foreign Tax Credit to lower your tax bill. In 2018 a U.S. expat can exclude up to $104,100 of foreign earned income.
  2. The reporting requirements for FBAR stay in place: you need to file FinCEN Form 114 if you have an aggregate value of over $10,000 in any foreign financial accounts you own or have a signature over.
  3. FATCA and Form 8938 also didn’t have any changes (unfortunately).

Read More

The Income Tax Act (ITA) is a lot like those word problems we all remember from grade school math. The word problem is a story told in numbers. Tax is a story told in numbers but the characters in the story are real life politicians and voters.

Let us take a humorous approach and give a real life example. Imagine you are a politician looking to get re-elected. You have the power to change the ITA because you currently hold office. You decide to change the ITA to encourage voters to vote for you. Let’s say you want to get young families to vote for you. You introduce a new tax credit that only young families can use. The tax credit gives a tax refund to families with children in registered sports activities. The formula in your head is: Read More

Grant Gilmour, Tax Advisor, Tax Blog, Vancouver, Canada, TaxConnections

There are various real estate expenditures that are deductible to the corporation and others that are capitalized or allocated to inventory. In this FAQ, we will discuss the real estate expenses that are deductible during the pre-acquisition phase as an operating expense to the corporation in the fiscal year that expenditures were incurred.

There are many “soft” costs in real estate such as representation costs, site investigation costs and financing expenses.

Representation costs are eligible for a deduction for amounts paid in the year. Examples of these costs are rezoning applications, project planning and preliminary design costs. Read More

Tax Credits and Deductions are probably the most exciting part when preparing your tax return. They both help you save money by reducing your overall income tax liability. So, you should take a full advantage of all the tax credits and deductions you qualify for.

Tax Credits and Deductions are probably the most exciting part when preparing your tax return. They both help you save money by reducing your overall income tax liability. So, you should take a full advantage of all the tax credits and deductions you qualify for.
As many still get confused about the difference between tax credits and tax deductions, here’s a simple introduction to the these two in the light of the New Tax Reform that just has been approved.  Read More

The U.S. citizenship comes with all the arduous requirements and liabilities, hence why more people than ever started to question whether the benefits outweigh the costs. Thought of renouncing a U.S. citizenship may pass through your mind if you are already a dual citizen, have no ties with the U.S. and don’t want to carry the U.S. tax burden anymore. Some people fall into the category of “Accidental Americans” and they have never even considered themselves being Americans, so it’s the only way to free themselves from the IRS and stop playing their tax game. Read More