Answers Archive

Re: Selling an old house I bought 4 years ago in the USa

Withholding tax of 10% will be applied to the sales proceeds. To avoid paying the 10% withholding tax, you should submit form 8288-B to the IRS. This form asks the IRS to decrease the withholding tax from 10% of the sales proceeds to the actual tax liability payable on the sale. The actual US tax … Continue reading

Re: Filing 1040NR

If you worked in the US and made more than $10K US, you cannot be exempt from US taxation on that income, regardless of the amount of days you spent in the US. It is only if you were working for a Canadian employer in the US for less than 183 days that you could … Continue reading

Re: Transferring to the USA through my company

Hello Jeremy, there are five things you should do or find out before you leave for the job. I will outline them below 1) Compensation: Find out if your employer has an international assignment compensation and be sure how it may apply to you. Most of these policies will provide various allowances and other benefits … Continue reading

Re: Holding shares in a foreign corporation

Hello Morty, if you own shares of a foreign corporation as a resident alien, you may be required to pay tax on a portion of the corporation’s income even if it has not been distributed to you. You may also have to file special information statements with your annual tax return regarding your investment in … Continue reading

Re: Move IRA to RRSP

Hi Bradley, Chase should forward the appropriate forms to the Canadian financial institution where your RRSP will be held. If they do not, you may have to do this yourself. Remember that US withholding tax will apply, but this can be recovered upon filing a Canadian tax return.

Re: Filing US Tax return, even though I don’t live there anymore

Hello Claudia, yes have to file US tax returns as long as you remain a US citizen. What you need to do is to file the last three years of US returns (2013, 2012, and 2011). Take the overseas earned income exclusion for your salary. You may wind up paying some small amount of taxes … Continue reading

Re: a question about franchise business HST

Hi Theresa, yes, the franchiser must still charge HST on franchise fees and royalties, because these are ‘taxable services.’ I understand that you, as the franchisee, do not charge HST to your customers. However, your HST status does not impact the HST payable on royalties and franchise fees.

Re: Setting up an RDSP?

Hello Marvin, a registered disability savings plan (RDSP) allows you to save for long term security of an individual with a disability in a tax-efficient manner with additional funds added by the government. The plan permits up to $200,000 to be contributed to the plan on behalf of the beneficiary. There are no annual minimum … Continue reading

Re: When posting private shares as security to CRA for departure tax, are there restrictions on use of funds in that corporation after departure?

Generally speaking, the CRA accepts a letter of credit, bank guarantee, or land & buildings as adequate security against departure tax. Private company shares can also be accepted at the CRA’s discretion. A third party valuation of the company and its shares is recommended. The company cannot undertake any transactions that would impair its value. … Continue reading

Re: Am I allowed to deduct financing costs?

Hello Maddy, yes, the costs related to securing financing for an investment property are deductible. However, they are only deductible over a period of time, not all at once. Typical costs include bank charges, CMHC fees and mortgage broker chargers. Novice investors mistakenly deduct these expenses as they are incurred. That makes them relatively easy … Continue reading

Re: Disability Tax Credit

Hi Jerry, you will need to do an adjustment for each year back to the date of eligibility. On your return, on the T1A enter the DTC amount for line 316. Please note that the DTC is different for each year, so you will have to look up the amount for each specific year you … Continue reading

Re: Name that should go on the title of an investment property?

Hi Seth, thank you for the question! Putting a name on a title seems like an easy decision, but there are many perspectives that you have to consider before putting a name down. For example, from a business perspective, deciding whose name should go on the title you would have to consider the marital breakdown, … Continue reading

Re: Combining an RRSP with a locked-in RRSP

Hello, you cannot combine the two RRSPs. A locked-in account is basically a replicate of a pension plan, which is designed to pay out income at retirement. With that in mind, a locked-in account has restrictions on when you can start drawing money. They also have an annual maximum amount you are allowed to withdraw … Continue reading

Re: Waiving CRA interest with a good reason?

Hello Brodie, you might be able to waive or reduce the interests if you request the CRA to take a look at the situation. The CRA will more than likely reverse the charges if there is a natural or human-made disaster, such as a flood or fire. A civil disturbance or situation in services such … Continue reading

Re: How to claim car allowance on T4

Hi Shay, It appears that you are receiving a taxable car allowance that is included in box 14 of your T4 slip. Box 14 includes taxable benefits from employment and wages paid to you during the year. If your employer has signed form T2200 and you are required to use your car for work, then … Continue reading

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