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2018 Dividends payment

Your company can pay dividends to you and your spouse so long as the articles of incorporation do not restrict dividend payments on the classes of shares issued to you and your spouse. Note that as of 2018, the federal government has placed restrictions on dividend payments made to family members who are shareholders of … Continue reading 2018 Dividends payment

Interest expenses in Real Estate

Hi Frank, A real estate agent or certified appraiser can determine the portion of the purchase price that is attributable to the land and the building. In cities like Toronto or Vancouver, the % of the purchase price that relates to the land tends to be higher. Note that only the building portion of the … Continue reading Interest expenses in Real Estate

Foreign Company as Shareholder in Canadian Subsidiary?

In either case, the Canadian corporation will be controlled by foreigners. This means that the Canadian corporation will not be eligible for the small business deduction and will therefore have a higher corporate tax rate (approximately 26% – federal + provincial). The major difference between the two options has to do with the withholding tax … Continue reading Foreign Company as Shareholder in Canadian Subsidiary?

Canadian corporation for US/CA citizen

Generally speaking, it is not advantageous for US citizens residing in Canada to incorporate a Canadian company, because the income earned by the corporation may be treated as sub-part F income for US purposes. This means, you will be personally taxed in the US on your Canadian corporation’s profits, and you will be taxed again … Continue reading Canadian corporation for US/CA citizen

How to claim full house rent as an employment benefit from my own corporation

Yes, you can have your corporation pay for all or a portion of your housing costs. Since you do not have a home office, the entire amount paid by your corporation to you in respect of housing will be fully taxable to you and included on your T4 slip. In addition, payroll taxes must be … Continue reading How to claim full house rent as an employment benefit from my own corporation

A few months ago I spent $100,000 to renovate an existing rental property.

Hi Mark, The renovations you made to your rental property will increase the cost basis of your property. For example, assume that you purchased your rental property for $400,000 and made $100,000 of renovations. As a result, the cost basis for your rental property will be $500,000 when calculating capital gains realized upon sale. Furthermore, … Continue reading A few months ago I spent $100,000 to renovate an existing rental property.

can I report my salary as an operating expense?

Yes, you can have your company pay you a salary and your company can claim a tax write-off for the salary paid. You must include the salary you received in your personal income. Note: payroll taxes must be deducted by your company from salary payments made to you.

When should I submit to CRA the departure tax return as a non resident for tax purposes?

Hello, You should file a departure return with the Canada Revenue Agency by April 30 of the year following the year of your departure. For example, if you cut your ties with Canada and left Canada in 2018, then the departure return must be filed by April 30, 2019.

Years to become Non resident

Hello, There’s no minimum number of years that you have to stay outside Canada to be treated as a non-resident of Canada. Non-residency is based on severing all of your primary ties and most of your secondary ties, and your intention to permanently leave. If you return to Canada after a short period of time, … Continue reading Years to become Non resident

183-day rule in 12 months

Hi Sally, If you reside in Canada for 183 days or more in any 12 month period, then you will be deemed to be a tax resident of Canada. Residents of Canada, including deemed residents, are taxable in Canada on their worldwide income. In your example, you plan on residing in Canada from August 1 … Continue reading 183-day rule in 12 months

Non-tax resident of any country

Hi Anna, It is possible, but highly unusual. Make sure you sever all of your primary and most of your secondary ties with Canada so that you will not be treated as a Canadian tax resident.

Financial Statements and Corporate Tax Return

Hi Mac, If the total fee includes bookkeeping charges (e.g. entering all the data into an accounting software, e.g. QuickBooks), then the total fee charged to you is reasonable. Our fees are as follows: Initial Tax Planning + Corporate Tax Return Preparation – $1,375 HST Return Preparation (if required) – $150 T5 Slip Preparation (for … Continue reading Financial Statements and Corporate Tax Return

Holding company

Hi Mac, Thank you for your question. A holding company also needs to file an annual corporate tax return and financial statements. The cost will be less than a regular operating company, because there are fewer transactions.

Tax implications when converting real estate from joint to sole ownership

Hi Hugo, The answer depends on whether you and your wife were (a) beneficial owners of the property, responsible for its maintenance, mortgage payments, utilities, and will participate in the profit on the eventual sale of the property, OR (b) title holders of the property, where you and your wife have no financial interest in … Continue reading Tax implications when converting real estate from joint to sole ownership

Personal Home Sale to Nephew

If you are living in this home, then you can claim the principal residence exemption on the gain. However, the sales price to your nephew will be readjusted to the market value of the property for tax purposes, because he is related to you. It’s okay if he is paying you back over a number … Continue reading Personal Home Sale to Nephew

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