Answers Archive

can we transfer existing business to new holding company?

Yes, you can transfer an existing business to a newly incorporated holding company on a tax-free basis by implementing a Section 85 rollover. I need more information about your business and it’s existing set-up to answer your questions in more detail.

to send money to my son in canada

Your best option is to send money to your son as a gift. Your son will not have to pay tax on the gift received, and there is no upper limit on the amount of the gift that you can give him. A gift letter should be prepared and notarized. Consider making a wire-transfer to … Continue reading

is there any way to defer taxes on securities traded in Non-Registered Account?

No, you cannot defer capital gains on the sale of marketable securities held in a non-registered account.

T1135 required for cryptocurrency?

If the currencies are held on an exchange outside Canada, and the total cost amount is more than $100,000 at any time in the year, then form T1135 must be filed.

What are the tax implications of a Canadian parent company with a wholly owned U.S. Subsidiary holding/investing cash at U.s subsidiary level?

The following are the tax implications: The US C-corporation (subsidiary) will pay US federal income tax at a rate of 21%, plus applicable State Income Tax on its annual profits If the income earned is passive in nature, then there will be a small net income inclusion for the Canadian Parent Corporation in respect of the … Continue reading

Extracting cash from corp that sold its only property (real estate)

It’s too late to add your spouse and income-split with her. Other than repaying your shareholder debt, consider paying yourself a tax-free capital dividend (equal to one-half of the capital gain).

how to find undepreciated capital cost of rental property in brampton?

In your case, the UCC is equal to the purchase price + closing costs paid because you have not claimed any CCA to date.

Transfer of Prior non Capital loss

Your spouse can rollover assets / shares at their cost amount to you (automatic rollover). When you sell the assets / shares, you can claim the capital loss.

withholding Tax On Dividends Paid By A US Company To A Canadian Parent Company (FAPI) Part 3

Forms 1042, 1042-S and 1042-T must be filed by March 15 of the year following the calendar year in which the dividend was paid. The deadline for payment is 15 days following the month in which the dividend payment was made.

property gift from india

If the property belongs to your mother and she is the beneficial owner of the property, then the after-tax sales proceeds can be paid to you in Canada, and you will not have to pay tax on the amount received. Your mother will be responsible for paying any capital gains tax to the Indian Tax … Continue reading

Best tax savings options for high earning spouse.

Hi Anu, Here are some tax tips for a high-income earning spouse: 1. Contribute to a spousal RRSP. RRSP contributions are deductible, and upon retirement, your lower-income spouse will include the withdrawals in his/her income. 2. Maximize your TFSA contributions. Income earned in a TFSA is tax-free, and withdrawals are not taxable. 3. Make a … Continue reading

Cash withdrawal

First, repay any shareholder debt owing. This is tax-free and the repayment is recorded as a reduction of the shareholder debt. Second, pay a taxable dividend (other than eligible) to the shareholders to the extent the company has any retained earnings. A dividend is reported on a T5 slip and is treated as a reduction … Continue reading

Small business (CCPC) shareholder restructuring/shares transfer

If your elderly parents meet the requirements, then yes, your elderly parents can claim the lifetime capital gains exemption. Consider purchasing their shares now, in order to trigger a gain, which can be offset with the exemption. In addition, creating a trust where your children are beneficiaries is very helpful to reduce estate taxes payable … Continue reading

HST Paid on Account receivable for 2019. Do I need to deduct the amont from q1 – 2020 for HST payment?

HST is payable on accounts receivable in the 4th quarter. However, you do not have to pay HST again when the accounts receivable is collected. Do not subtract Q4 HST paid on accounts receivable from Q1 in the subsequent year.

principal residence exemption

If you have not claimed CCA, and there is no structural change when the basement was built, then you can claim the principal residence exemption on the entire gain on the sale of your primary residence, assuming that you lived in the property for all of the years you owned it. If there’s an audit, … Continue reading

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