Answers Archive

Corporate Tax Refund From RDTOH Account

Hi Suresh, There are two types of RDTOH accounts—NERDTOH and ERDTOH. Your corporation should pay you an eligible dividend to receive a refund from the ERDTOH account and a non-eligible dividend to receive a refund from the NERDTOH account. Your corporation will receive a refund of $38 for every $100 dividend paid.

I am canadian non resident. I am part of a general partnership that had losses. I am wondering if being a no resident, I have to file personal income tax, even if I have no tax to pay

No, you do not need to file a tax return with the Canada Revenue Agency to report a business loss if you are a non-resident of Canada.

Using canadian credit cards after emigration

Hi Sam, The answer depends on whether you moved to a country with a tax treaty with Canada. If you moved to a non-treaty country, I recommend cancelling your Canadian credit cards or, at the very least, keeping no more than one. If you moved to a treaty country (e.g., the United States), having multiple … Continue reading

Departure Tax and Deemed Capital Losses

Hi Mohan, You can elect to dispose of certain properties ordinarily exempt from departure tax, including Canadian real estate and inventory held by a Canadian sole proprietorship. This election can be beneficial if you incur a capital loss due to the deemed disposition of non-exempt properties. However, if you do not own Canadian real estate … Continue reading

Personal Tax

Hi David, Yes, you must pay HST on the sale price of short-term rental properties. A property is considered a short-term rental if the owner uses it for personal use less than 50% of the time during the rental season, and more than 90% of the bookings are for 60 days or less. This represents … Continue reading

Clarification on Tax Treatment of US LLC as General Partner in Limited Partnership for Canadians

Hi John, The LLC should be owned by a single member and therefore it will be classified as a disregarded entity. A disregarded entity does not have to file a separate US tax return which will simplify and reduce your compliance costs.

Capital Gains Tax on Real Estate Sales in Canada

Hi Chris, The Government of Canada increased the capital gains inclusion rate from 50% to 67% for property sales made after June 24, 2024. You will owe $189,917 of capital gains tax based on the new rules, which is calculated as follows: 1) $250,000 x 50% inclusion rate x 53% marginal tax rate = $66,250 … Continue reading

Forming a US LLC for Construction Expansion

Hi Ben, You can form a US LLC, but make sure that you elect that it be taxed as a C-corporation. Otherwise, you will be double taxed. This is because, without the election, the IRS will treat the LLC as a pass-through entity. However, the CRA always treats US LLCs as foreign corporations. This creates … Continue reading

Inquiry About Tax Withholding Change

Please complete form NR301 (available from the CRA’s website) and send it to InvestorLine.

Transfer property from my corporation to myself

Hi Hannah, You have to sell the property from the corporation to yourself for fair market value. If the property has increased in value, there will be a capital gain.

Filing tax- working in the US under tn , spouse and kids in Canada

Hi Kenny, You are likely a tax resident of Canada under the Canada-US tax treaty because your home, spouse, and child are in Canada. Therefore, you are liable for Canadian income tax on your global income. You must claim a foreign tax credit to avoid double taxation. My services & estimated fees are as follows: … Continue reading

tax filing for Canadian resident with US based company

Thank you for your question. I do work with non-Canadians living in Canada and doing business in the US. I must first determine whether you are a resident of Canada or non-resident of Canada for Canadian tax purposes. To make this determination, I will refer to the tie-breaker rules contained in the UK-Canada tax treaty … Continue reading

Penalty on late filing of t2

Hi Sam, The corporate tax return filing due date is 6 months after the company’s year-end. For example, if a company has a year ending on March 31, 2024, the corporate tax return must be filed by September 30, 2024. If you pay the corporate tax balance due within 3 months of the company’s year-end … Continue reading

Taxation for other private corporation and non resident dividends

Hi Sam, The corporate tax rate for a non-CCPC is 27% on average (varies by province). Assuming a non-CCPC made a profit of $100,000, a corporate tax is payable for $27,000. In addition to this, a non-resident withholding tax of 25% is deducted from dividends paid to non-resident shareholders. Assuming a dividend payment of $73,000, … Continue reading

how do i enter tax paid for last year in T2

The best practice is to amend the previous year’s corporate tax return to correct the error. It should not trigger an audit since there will not be any change to the taxable income. If you are uncomfortable doing this, then record the amount in this year’s “Current Income Tax Expense.” The current income tax expense … Continue reading

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