Answers Archive

Working remotely outside Canada

Hi Syed, If you will work from Canada for a Denmark based employer and the employer does not have an office or branch in Canada, then the employer should set up a Canadian payroll account to employ you or they should engage the services of a PEO in Canada to employ you. As a Canadian … Continue reading

Non-resident earning a canadian pension further contributing to RRSP

Hi VMV, You cannot reduce the non-resident withholding tax deducted from pension payments by contributing to your RRSP. You are correct that a non-resident can contribute to his RRSP providing he has available room. A better option is to file a Section 217 Non-Resident Tax Return to get a refund of the tax withheld.

Is renting 30% of my principal residence a bad idea?

Hi Franklin, It’s not a bad idea. You can still claim 100% of the principal residence exemption when you sell your house if you do not claim Capital Cost Allowance, you not alter the structure of the home (e.g. by creating a separate basement entrance), and the profit from rent is not your primary motive … Continue reading

RC268 Form cross border commuter

Hi Doug, Enter the amount of the employer contributions to the 401-K money purchase plan. This amount will flow to line number 7 on Page 2 of form RC268 and to line 206 of your T1 General Return. The CRA uses his amount to calculate the Pension Adjustment. The Pension Adjustment reduces your RRSP room.

mortgage is under both names, is it possible rental property income, can it be under my name only

Hi Juanita, If you and your spouse are both on the title to the property and both of you contributed equal amounts to purchase the property, then both spouses must report 1/2 of the income and expenses of the property.

can NR claim HST rebate

Hi Joey, Non-residents of Canada can claim the GST rebate on the purchase of newly constructed property that is leased to a tenant.

Is claimimg cCA on rental property not a good idea if it’ll be converted to personal use?

Hi Levi, When you change the use of a rental property to a principal residence there will be a deemed disposition at that time. The deemed selling price is equal to the fair market value of the property on the date of the change in use. This can result in a capital gain and recapture … Continue reading

transfer of property from CCPC to its owners

Hi KTK, The properties can be transferred to you, but the transfer price must be equal to the fair market value on the date of the transfer. This could trigger a capital gain. You cannot claim the lifetime capital gains exemption. The LTCGE is available when a shareholder sells his/her Qualified Small Business Corporation Shares.

Canadian Rental Income for Non Resident in US

Hi Rajan, Please contact the CRA, non-resident withholding tax department, apply for a non-resident remitter number and make the payment for the past-due amount. Then, request an NR4 Proforma from the CRA. The last step to get a refund is to file a Section 216 Non-Resident Return.

Non-Resident Federal 48% Surtax

Hi Henry, Please check the T4 Slip. If the province of employment is “Ontario”, the surtax will not apply, and in this case, ensure that you enter the Province of Taxation as Ontario. If the province of employment is “Outside Canada”, the surtax will apply.

Foreign business T1135

Hi There, If the company is incorporated, file form T1134 Summary and Supplement. If the company is a partnership or a sole proprietorship, file form T1135. Vacant commercial properties held in a foreign partnership or your personal capacity are reported on form T1135.

Canadian Tax Residency

Hi Helena, You likely became a non-resident of Canada when you left Canada to study in the UK in 2020. You have to wait for the CRA to issue a Determination of Residency Letter before filing. Based on the information provided, you do not have a filing obligation with the CRA for the 2023 tax … Continue reading

Income tax for indian seafarer having PR card but sailing from india

Hi Sandeep, If you have a valid PR and your ties to Canada are stronger than to India, you will continue to be a tax resident of Canada even if you are outside Canada for more than 183 days.

Canadian Rental Income for a non resident

Hi Janice, Complete a Section 216 Non-Resident Return. DO NOT file a T1 non-resident return. Our fee to prepare a Section 216 Non-Resident Return is $400 (one owner) + disbursements. If you would like to proceed, please complete this checklist and return it to me: https://madanca.com/section-216-checklist/

real estate ownership to family traust

Hi Hezi, You can transfer property to a family trust. If the fair market value is more than the cost amount of the property, you will pay capital gains tax in respect of the transfer.

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