Answers Archive

Principal residence gift to family member (adult)

This is a bad idea. If you transferred your property to your sister for below fair market value (e.g. for $1), then the CRA will reassess the sales price to be equal to the fair market value of your property at the time of the transfer. What’s worse is that your sister’s cost basis in … Continue reading

Tax policies on formation of new company

Hi Vinesh, The corporate tax rates on active business income are as follows: 1.12% – if the corporation is not controlled by non-residents of Canada. To meet this requirement, at least 50% of the corporation’s voting shares should be owned by residents of Canada. Note that the 12% rate applies to net active business income … Continue reading

How does my income in India calculated in Canada?

Hi Ram, If you moved to Canada with the intention to live in Canada permanently, and you have a permanent residence (either rented or owned in Canada), then you are likely a tax resident of Canada pursuant to the Canada-Indian tax treaty. Having said that, I need a list of all of your ties to … Continue reading

Tax implications for Canadian Shareholders of the merger of two uS companies

The capital gain should be the difference between the fair market value of the consideration received in excess of the amount paid for the original shares. Consideration includes cash and non-cash (i.e. shares of Teladoc).

I plan to rent my home on AirBnB for most of the year for that do I have to charge HST?

If you collect more than $30,000 from short-term rentals, then you must charge HST and file an annual HST return. The rate of HST in the province of Ontario is 13%. In addition, you can claim input tax credits for HST paid on rental expenses.

Can I claim import duties as iTCs?

Yes, you can claim both the HST on the product, as well as HST on the brokerage fee ($17.37) as ITCs.

Personal house and land of more than 10 acres all principal residence?

Only 1.2 acres of the land on which the primary residence is situated will qualify for the principal residence exemption. The shop will not qualify.

Moved from US to Canada

If the person moved to Canada permanently, then he is a factual resident of Canada, starting from the date he moved to Canada. For US purposes, he will be a resident up to the date of departure, and a non-resident thereafter. This is assuming that the Person did not keep any primary ties with the … Continue reading

Principal residence Exemption

Please complete Form T2091 and Schedule 3 with your 2022 tax return and claim the Principal Residence Exemption.

If I inherited foreign real estate through a deceased relative’s will and sold it off in the same tax year do i need to file t1135 or t1142 or both?

If the property was a personal use property at the time of inheritance, then do not complete form T1135. If the property was a rental property at the time of inheritance, then complete form T1135. Lastly, the sales proceeds deposited into a bank account outside Canada must also be reported on form T1135. Do not … Continue reading

how can i change from a corporation (single person) to a sole proprietor?

Thank you.

Business loss

Hi Mark, Business losses can be carried back to the preceding 3 tax years or carried forward for up to 20 tax years. Complete Schedule 4 of the T2 Return to carry-back a loss.

rental property + full time job

Hi Jacky, Canadian tax returns are filed separately and there is not an option to file jointly. If you are the owner of the 2 properties, you must report the rental income and expenses on your return. If your wife is performing part-time services (e.g. property management, repairs and maintenance), consider paying her a salary … Continue reading

What liability GIFI code should i use to Record an employee expense that will be reimbursed?

Hi, Use GIFI Code 2621, Trades / Accounts Payable.

Tax implications of canadian non resident selling stock

Hi, You need to file a T1 Departure Return and you may owe departure tax. Gains / losses from marketable securities sold after your departure date are not taxable in Canada.

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