Answers Archive

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

Re: Does Canada offer a child tax credit?

Hello Andreas, yes, Canada does offer a tax credit for each child under the age of 18. The tax credit amount is at least $2,000 and you do not need a receipt to claim the credits! The credit amount changes each year, but assuming a credit of $2,000 the actual federal tax saving is $300 … Continue reading

Re: Selling US property while in Canada

Hello Marsha, since you sold your property while in Canada, you are required to report the sale on your Canadian tax return. If you sell the property for more than its tax cost, you’ll have to report a capital gain in Canada. In addition, because your property was physically in the US, the US will … Continue reading

Re: Being audited with lost receipts

Hi Jacob, you may be in luck! This happens all the time so the CRA will give you the benefit of the doubt if you can show reasonable support for the income, deductions, and credits reported on your return. The easiest way to reconstruct missing tax records is to ask for new ones. For example, … Continue reading

Re: Recieving rental income from the US as a Canadian

Hello Laura, due to the non-resident tax system, your worldwide income will not be taxed in the US if you have US rental income. For example, if you have employment earnings in Canada of $30,000 and you are a non-resident of the US, then the US will not have the right to tax your Canadian … Continue reading

Re: Adding another child to an RESP

Hello Kelly, you may add your new child to the existing RESP only if you meet the following requirement: the child must be under 21 at the time you add him or her to the plan. If he or she is over 21 at the time you want to add him to the RESP, he … Continue reading

Re: Public transportation deductions

Hello April, yes you are allowed to claim public transportation credits by filing out line 364 of schedule 1 on your tax return. However, you will need to follow some requirements before you can claim the credits. The first is that you need to buy a monthly or yearly metro pass. Buying one way or … Continue reading

Archives: Answers