Answers Archive

Are non-sRED Software Development Costs Deductible?

Hi, Yes, you can deduct expenses incurred for software projects that don’t qualify for the SR&ED program. Note that capital assets purchased in the year are depreciated over a period of time.

Health Benefits taxation for a Shareholder

Hi Mariam, Group benefits (medical and dental) are not a taxable benefit, so long as you (shareholder) are also an employee and the benefits you receive are the same as the rest of the employees.

are Owner Contributions and Self Employment Tax Withholdings deductible?

Hi, It appears that you are on your company’s payroll system. In this case, the company should issue a T4 slip to you, and not a T4A. The company can claim a tax deduction for the gross salary paid, and the employer portion of CPP premiums paid (you are EI exempt). You cannot claim a … Continue reading

What to do when CRA violates Income Tax Act Subsection 220(4.5) and owes non-resident tax refund ?

Hi, Please complete form RC4288 Request for Taxpayer Relief and send it to the CRA.

what bank account do expenses that are partially personal come out of

Hi Jill, Pay for these expenses yourself and then have your company reimburse you on a monthly or quarterly basis for the business use portion of your expenses.

Can the Shareholder use personal name on Title?

Hi, You should consult with an attorney regarding the legality of the contract. At a minimum, your grandmother should have received independent legal advice.

2023 TD1 Federal Form – line 7

Hi, Enter $15,000 on line 1 and 7 of form TD1. Enter $0 on line 8 since you are married and don’t meet the conditions for the eligible dependent tax credit. The total claim amount on line 13 should be $30,000.

is a medical corporation a qualified small business corporation

Hi, Your shares are not QSBC shares if your corporation did not carry on an active business in the 24 months prior to sale.

Will I Still be a tax resident in Canada?

Yes, you will still be a tax resident of Canada, which means you are taxable in Canada on your global income. To avoid double taxation, claim a foreign tax credit on your Canadian return for the American taxes paid.

Do US tax residents need to Report their cDN Corporations to the IRS?

If you become a US resident for tax purposes, you will need to file form 5471 with the IRS in respect of your Canadian corporation. In addition, you will be subject to Canadian departure tax when you leave Canada. I suggest that you dissolve the corporation and pay yourself a final cash dividend prior to … Continue reading

Dividends from US real Estate

The income earned by your and your husband’s US C-corporation is classified as foreign accrual property income (FAPI) for Canadian tax purposes. If the corporate income tax paid (Federal + State) in the US is less than 25%, then you both will have a net income inclusion for Canadian tax purposes in respect of the … Continue reading

Can we buy Primary residence with Corporation in Canada ?

You can purchase a home through a corporation. The arrangement is such that the corporation uses its cash retained earnings in combination with a bank mortgage (if required) to purchase a property. You then become a tenant and pay fair market value rent to the corporation. There is risk involved with his strategy, because the … Continue reading

Corporate taxes on dividends

I am assuming that all of the companies involved are Canadian corporations. In this case, your investment company can claim a tax deduction under section 112 of the Canadian income tax act for the dividends received. To do so, complete Schedule 3 of the T2 corporate tax return. In addition, if your investment company owns … Continue reading

can we transfer existing business to new holding company?

Yes, you can transfer an existing business to a newly incorporated holding company on a tax-free basis by implementing a Section 85 rollover. I need more information about your business and it’s existing set-up to answer your questions in more detail.

to send money to my son in canada

Your best option is to send money to your son as a gift. Your son will not have to pay tax on the gift received, and there is no upper limit on the amount of the gift that you can give him. A gift letter should be prepared and notarized. Consider making a wire-transfer to … Continue reading

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