Answers Archive

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

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

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

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.

Do I enter my business’s GST payments to government as an item on schedule 125

GST/HST collected from customers and GST/HST payments made to the CRA should be recorded in a GST/HST liability account, which is reported on GIFI Schedule 100, Balance Sheet.

PRE on Rental

Yes, you will pay capital gains tax when you sell your property on 67.6% of the capital gain since 67.6% of the property is used to earn rental income.

Gift Deed Transfer From Parents Account In India To Canada

Her 2 adult children will not pay Canadian income tax on the cash gifts received. If the cash is kept in an Indian account belonging to the adult children and the amount is more than $100,000 per child, then the children must report this amount to the CRA on form T1135, foreign income verification statement. … Continue reading

retain Earning adjustment

As you know, the prior year’s closing retained earnings should appear on the current year’s balance sheet as opening retained earnings. In your friend’s case, this was not done properly. Therefore, you will likely need to redo the financial statements for the current year.

Returning Canadian and sale of Property after return

Yes, you can sell your Canadian rental property in the current financial year ended on December 31, 2020.

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