Answers Archive

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

Tax residency

You cannot be a tax resident of Canada and Portugal at the same time according to the double taxation treaty between the 2 countries. You are deemed to be a resident of the country where your permanent home is located. If you have a permanent home in both Portugal and Canada, you are a resident … Continue reading

Emigration ccpc year end

Hi Sam, The CRA should have reflected the updated year-end if you specified the deemed year-end on Box 61, checked “Yes” to Box 66 and selected “Other Private Corporation” in box 40 on the amended T2 return. If you did all of the above and the CRA has not updated the year-end, then contact the … Continue reading

Dissolving provincial corporation

Hi Sam, If the computer has limited to no value, claim a depreciation expense for the remaining cost on the balance sheet. Otherwise, record $3,000 to dividends, as you received a company asset for your personal benefit. Do not adjust the share capital, common shares.

Tax Residency In Australia VS. Canada (online small business)

Hi Stephanie, The corporate tax rate for Australian small businesses is 25%. A small business is a business with annual sales of less than $50 million AUD. The corporate tax rate for Canadian small businesses is 12%. A small business is a business controlled by Canadian residents with active net income of less than $500,000 … Continue reading

Working remotely outside Canada

Hi Syed, If you will work from Canada for a Denmark based employer and the employer does not have an office or branch in Canada, then the employer should set up a Canadian payroll account to employ you or they should engage the services of a PEO in Canada to employ you. As a Canadian … Continue reading

Non-resident earning a canadian pension further contributing to RRSP

Hi VMV, You cannot reduce the non-resident withholding tax deducted from pension payments by contributing to your RRSP. You are correct that a non-resident can contribute to his RRSP providing he has available room. A better option is to file a Section 217 Non-Resident Tax Return to get a refund of the tax withheld.

Is renting 30% of my principal residence a bad idea?

Hi Franklin, It’s not a bad idea. You can still claim 100% of the principal residence exemption when you sell your house if you do not claim Capital Cost Allowance, you not alter the structure of the home (e.g. by creating a separate basement entrance), and the profit from rent is not your primary motive … Continue reading

RC268 Form cross border commuter

Hi Doug, Enter the amount of the employer contributions to the 401-K money purchase plan. This amount will flow to line number 7 on Page 2 of form RC268 and to line 206 of your T1 General Return. The CRA uses his amount to calculate the Pension Adjustment. The Pension Adjustment reduces your RRSP room.

mortgage is under both names, is it possible rental property income, can it be under my name only

Hi Juanita, If you and your spouse are both on the title to the property and both of you contributed equal amounts to purchase the property, then both spouses must report 1/2 of the income and expenses of the property.

can NR claim HST rebate

Hi Joey, Non-residents of Canada can claim the GST rebate on the purchase of newly constructed property that is leased to a tenant.

Is claimimg cCA on rental property not a good idea if it’ll be converted to personal use?

Hi Levi, When you change the use of a rental property to a principal residence there will be a deemed disposition at that time. The deemed selling price is equal to the fair market value of the property on the date of the change in use. This can result in a capital gain and recapture … Continue reading

transfer of property from CCPC to its owners

Hi KTK, The properties can be transferred to you, but the transfer price must be equal to the fair market value on the date of the transfer. This could trigger a capital gain. You cannot claim the lifetime capital gains exemption. The LTCGE is available when a shareholder sells his/her Qualified Small Business Corporation Shares.

Canadian Rental Income for Non Resident in US

Hi Rajan, Please contact the CRA, non-resident withholding tax department, apply for a non-resident remitter number and make the payment for the past-due amount. Then, request an NR4 Proforma from the CRA. The last step to get a refund is to file a Section 216 Non-Resident Return.

Non-Resident Federal 48% Surtax

Hi Henry, Please check the T4 Slip. If the province of employment is “Ontario”, the surtax will not apply, and in this case, ensure that you enter the Province of Taxation as Ontario. If the province of employment is “Outside Canada”, the surtax will apply.

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