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If i Consider withholding tax as my final tax obligation, do i still need to file my tax returns?

No, you are not obligated to file a Non-Resident Section 216 Return in respect of the rental income that you collected from your rental property in Canada. However, you can deduct operating expenses and depreciation on this tax return, which can result in a full or partial refund of the withholding taxes you remitted to … Continue reading If i Consider withholding tax as my final tax obligation, do i still need to file my tax returns?

How would incorporating affect capital gains made from selling real estate?

It’s not a good idea to own real estate in a corporation anymore, because of the high tax on capital gains and passive investment income. The tax rates are lower for individuals for real estate investments. However, you could make a corporation the ‘title holder’ for real estate investments. This means a corporation would hold … Continue reading How would incorporating affect capital gains made from selling real estate?

Can you become a non-resident of Canada if you owe taxes?

Yes, you can become a non-resident of Canada if you owe taxes.

Filing T1135

Hi Marjana, you must report the cost amount of foreign property in excess of $100,000 on form T1135. For example, assume that you and your spouse jointly purchased a US rental property for $250,000 CAD. The cost amount per spouse comes to $125,000 ($250,000 divided by 2), which is in excess of $100,000. As a … Continue reading Filing T1135

Is it possible to split rental income with spouse when mortgage is only on my name? (Downpayment however is coming from our joint account line of credit)

Hi Ram, if both spouses equally contributed to the down-payment for the property and the ongoing expenses are also equally shared, then the rental income can be split evenly between both spouses. I recommend that your prepare a separate agreement that states that each spouse is responsible for 1/2 of the expenses, including mortgage payments.

Do I need a business license on my income tax for freelance work?

Schedule C is for American returns. If you are filling out a Canadian return, complete form T2125 for business income and expenses. You do not require a business number if you are operating under your own name.

Vacant land and tax residency

You and your wife will not become tax residents of Canada by buying vacant land in Canada.

Am I resident or Non-Resident?

I recommend that you return to Canada after the year-end. If you return in 2017, it will complicate your tax filing situation. This is because you cannot become a non-resident and a returning resident in the same tax year.

How can I deduct interest on a second mortgage?

You can deduct the interest paid on a second mortgage if the proceeds from the second mortgage were invested in an income producing investment / business. Otherwise, the interest paid is non deductible.

Child Benefit and Tax Return Filing outside of canada

You were a non-resident of Canada, since you temporarily stayed in Canada, and left after a few months. In addition, you had very few ties to Canada. You are not eligible for the Canada Child Benefit and you cannot file a tax return as a resident of Canada, until you move to Canada permanently.

Can I pay my Canadian taxes without income in Canada?

You should not file a Canadian tax return because (a) you did not earn any income in Canada and (b) you are a non-resident of Canada for tax purposes. You will not be liable for Canadian income taxes.

What are the rules around carrying forward unused cCA?

Hi Janet, thanks for your question. CCA is a discretionary deduction. You can choose to claim it in one year, and not the next – it’s totally up to you. When you claim CCA in a year, the UCC (undepreciated capital cost) is reduced by the amount of the CCA claimed in that year. If … Continue reading What are the rules around carrying forward unused cCA?

What Rate To Charge World-Wide Customers Via Online Sales?

Hi Edward, if you are selling to customers located outside of Canada, then do not charge them GST/HST. If you are selling to customers within Canada, then you must charge them GST/HST.

Can a non-capital loss for a certain year be carried forward?

In your example, you can apply the 2010 loss of $10,000 to the net income earned in the 2012 tax year. The non-capital loss can be carried-forward for up to 20 tax years.

First Year of Being Incorporated

These expenses should be recorded by your corporation. I suggest that you purchase a tax return preparation software from TurboTax or Ufile if your returns is simple to complete. Otherwise, hire a tax professional.

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