Archives: Answers

Answer

Non Resident Canadian

Hi Ken, no. He cannot become a non-resident, since his spouse and children are living in Canada.

Tax Waiver (Regulation 105 Waiver)

You could apply for a tax-waiver (regulation 105) to stop withholding tax from payments made to you by your Canadian customer. BUT, the tax only applies to payments made in respect of services physically performed in Canada. This will come to a small amount, since you are only working physically in Canada for a few … Continue reading Tax Waiver (Regulation 105 Waiver)

If a shareholder took a loan from the company to pay for a downpayment on a home dwelling, How is that accounted for and how to account for it over time?

Thank you for your kind feedback. An employee can receive a loan from his employer (corporation) and not have to pay tax on the loan proceeds, if: – the amount of the loan is reasonable – the interest charged on the loan is at market rates – the amortization period is fair (e.g. 25 years) … Continue reading If a shareholder took a loan from the company to pay for a downpayment on a home dwelling, How is that accounted for and how to account for it over time?

Where does My shareholder account fall on the company’s balance sheets And Do I eventually need to pay it back?

The shareholder loan represents the money that your company owes you for expenses that you paid on behalf of your company, less shareholder loan repayments made to you. For example, assume that you paid $40,000 of expenses on your company’s behalf during the year. Of the $40,000, your company had repaid you $15,000. This means … Continue reading Where does My shareholder account fall on the company’s balance sheets And Do I eventually need to pay it back?

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.

Pin It on Pinterest