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Partnership Incorporation in US with US and Canadian Partner

Thank you for your question. I am assuming that you are carrying on an active business in Canada with your American partner. If this is the case, then you and your American partner should form a Canadian Corporation to do business in Canada. I further suggest that you own a majority of the voting shares … Continue reading Partnership Incorporation in US with US and Canadian Partner

Can i take Depreciation Cost since the Time of Conversion Personal to Rental?

If you converted your primary residence into a rental property, then the cost basis of your property is equal to the fair market value of the property at the time of conversion. Subtract the land value from the total value at the time of conversion to arrive at the value of the building. The building … Continue reading Can i take Depreciation Cost since the Time of Conversion Personal to Rental?

Incorporate a business

If you continued to collect payments and invoice customers from your sole proprietorship, then you can record the income on your personal tax return. You can fill out and file form GS44 to claim an exemption from collecting HST on the sale of your business assets to your new corporation. I’m assuming that your vehicle … Continue reading Incorporate a business

If we are planning to buy a house but have plans to rent out the basement, can we still be classified as first time home buyer?

Yes, you can still be considered as a first time home buyer so long as you did not buy a home in the previous 4 years. You do not need to be registered as a business owner to rent your basement. Report the rental income collected and expenses incurred on form T776, which should be … Continue reading If we are planning to buy a house but have plans to rent out the basement, can we still be classified as first time home buyer?

Taking Depreciation on rental property

Yes, you can claim Capital Cost Allowance. This should be claimed when filing a Section 216 Non-Resident Rental Return.

Documents needed for tax return by mail

Submit your W2 slip plus any other tax slips that you have along with your 1040 return to the IRS.

Incorporate immigration practice business or Keep Sole proprietorship?

Hello, If you have no immediate need to use the cash generated from the business profits for personal purposes, then incorporate. In this manner, you will avoid payment of high personal tax on the business profit, and your corporation will only pay 12.5% corporate tax on the business profit.

When is a rental property sold by non-resident of canada considered treaty exempt property?

According to the Canada-US tax treaty, gains from the sale of real estate are first taxable in the country where the real estate is located. As such, Canada has the right to tax the gains from the sale of your Canadian rental property. Your lawyer will hold-back 25% of the sales proceeds, until you provide … Continue reading When is a rental property sold by non-resident of canada considered treaty exempt property?

Non Resident Tax and bilateral treaty

According to the Canada-Germany tax treaty, lump-sum withdrawals / payments from a RRSP to a non-residents of Canada are subject to a non-resident withholding tax of 25%. It could be that she was receiving periodic payments, which are subject to a lower withholding rate of 15%.

Mutual fund investment on the balance sheet: book value or market value?

For tax purposes, the balance sheet should reflect the book value as of the date the investments were purchased. Purchases and sales made in the tax year will affect the book value.

Child Tax Benefit for international minor children?

That’s a very good question. I believe the answer depends on whether the kids are your children. A child is from birth or legal adoption. If you have legally adopted the children, then you can certainly claim the Canada Child Benefit because the children live with you and you are their primary caregiver. However, I … Continue reading Child Tax Benefit for international minor children?

Establishing Residency in Canada

Sell the property before you come back to Canada permanently in order to avoid Canadian capital gains tax, or transfer the property to a family member that has no connection with Canada prior to coming to Canada. If you sell the property after you come back to Canada, then there could be a taxable capital … Continue reading Establishing Residency in Canada

Husband wants to file non-resident so he does not pay tax?

Your husband will continue to be a factual resident of Canada, because his spouse and children are living in Canada. As such, he will have to report his worldwide income to the CRA and pay Canadian taxes on his worldwide income. He can claim a foreign tax credit on his Canadian tax return for the … Continue reading Husband wants to file non-resident so he does not pay tax?

interest free loan

A corporate employer can make a loan to an employee to purchase a vehicle to be used by the employee for business purposes. The prescribed rate of interest (2%) should be charged on the loan. As such, you must be an employee of your corporation to qualify. Otherwise, you must include the shareholder loan in … Continue reading interest free loan

Treatment of Non resident taxpayers in Canada

The answer depends on the type of income being earned in Canada by the non-resident of Canada. See below the tax deductions available to a non-resident for 3 different sources of income from Canada: 1. Rental income. Deductions include: property taxes, utilities, repairs, insurance, mortgage interest. 2. Business income: Deductions include: advertising, banking fees, cell … Continue reading Treatment of Non resident taxpayers in Canada

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