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Answer

Should I take cash out of business ban account and incorporate another business and buy an investment rental?

Follow these steps: 1. Incorporate a company to purchase real estate (e.g. Real Estate Inc.) 2. Make a tax-free loan (e.g. $150,000) from your existing operating corporation to Real Estate Inc. 3. Charge 1% interest on the loan to be paid by December 31 of each year 4. Real Estate Inc. will use the loan … Continue reading Should I take cash out of business ban account and incorporate another business and buy an investment rental?

How much is foreign Tax Credit for house sold in India

The foreign tax credit will be the lesser of (a) the taxes paid in India on the capital gain and (b) the taxes payable in Canada on the capital gain. The highest capital gains tax rate in Canada is 27% (approximately), so you should receive a foreign tax credit of 20%, leaving a balance owing … Continue reading How much is foreign Tax Credit for house sold in India

Buying Real estate through partnership

From a tax perspective, it is possible for work permit holders living in Canada and PR card-holders to invest in Canadian real estate. Before purchasing, make sure that all individuals qualify for a mortgage. It’s best for the two investors to enter into a joint venture agreement. Note: In Ontario, the foreign buyer’s tax (15% … Continue reading Buying Real estate through partnership

Transfer Money From Parents Account In India To My account in Canada

Yes, your parents should prepare a gift letter specifying the following information: (a) name of the giver, (b) name of the recipient, (c) date of gift, (d) amount of gift. The gift letter should be notarized in India. You do not have to pay tax in Canada on cash gifts received.

Non-Eligible Dividend ( Property Dividend)

You will pay personal income tax on the taxable amount of the non-eligible dividend received. The actual amount (before gross-up) will be equal to the fair market value on the date the land is received by you (i.e. when the title is transferred from the company to you). Once the title has been transferred, you … Continue reading Non-Eligible Dividend ( Property Dividend)

3 Tier Real Estate Structure

For Canadian tax purposes, the 3 tier structure works well. Make sure that the properties are profitable and generating positive cash flow before implementing the 3 tier structure. For US tax purposes, a US Limited Partnership will reduce your liability and help you avoid double taxation.

What conditions have to be met for a Canadian Corporation deduct chaitable donations?

Generally speaking, a corporation can claim a deduction for charitable donations made up to 75% of its net income for the year. The donation must be made in the year to a registered charity and the corporation should receive a donation receipt specifying the name of the organization, the date the donation was made, the … Continue reading What conditions have to be met for a Canadian Corporation deduct chaitable donations?

eligible dividends as investment income in t2

The actual amount of eligible dividends received by the corporation in respect of its investments in marketable securities should be entered on Schedule 3 of the T2 return. When preparing Schedule 3, make sure that you specify that the dividends received are tax-deductible, under Section 112, and paid by a non-connected corporation. Your corporation will … Continue reading eligible dividends as investment income in t2

Schedule 546

This form is only for companies incorporated in Ontario, and not for Federally incorporated companies.

Structure of investment

A US C-corporation owned by a Canadian holding company is a tax efficient structure for Canadians doing business in the US. The following points should be noted: 1. A US C-corporation pays a federal corporate tax to the IRS at a rate of 21% on business profits. State taxes are extra. 2. After-tax profits can … Continue reading Structure of investment

Gifi Code of business-use-of-home expenses and Gifi Code of tax-free vehicle allowance in schedule 125

Record ‘business-use-of-home expenses’ in GIFI Schedule 125, Line 8911 (real estate rental). This is akin to rent expense for an office space. The tax free vehicle allowance expense should be recorded in GIFI Schedule 125, Line 9281 (Vehicle Expenses).

filing T2 return, T3 slip not till march

The accountant may have reviewed your investment statements to calculate the gains and income for the year ended November 30. Once the final T3 slip arrives in March, the return can be amended or an adjustment can be made in the subsequent year if the adjustment is small.

Can I use Canadian witholding on annuity payments as a tax credit on my US return?

Pursuant to the Canada-US Tax Treaty, annuity payments are subject to a 15% withholding tax. To avoid double taxation, claim a foreign tax credit on your US 1040 return for the Canadian taxes deducted.

are canadian corporations taxed on foreign income if they don’t carry on business in canada

A company incorporated in Canada is taxable on its worldwide income. This is because a company incorporated in Canada is a tax resident of Canada.

gifi code for overhead

Enter the amount of rent paid on GIFI Code 9811. Do not amend the previous year return, because both rent and management fees are tax deductible.

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