Answers Archive

Switching from Restaurant owner to Restaurant lessor

Hi Tien, Apply for a new GST/HST number. Separate the income and expenses into 2 periods: (a) restaurant operator and (b) rental property. The profit made in period (a) is active and taxed at the small business tax rate. The profit made in period (b) is passive and taxed at the passive income tax rate. … Continue reading

Foreign property -more than one home Abroad

Hi Mohan, You can have more than one personal use property, including a home that is occupied by your parents that you visit on occasion. Personal use property is not reported on form T1135.

Filing income tax for closed business

Hi Erin, File your personal tax return based on the T4 slips that you received. The owner is responsible for any unpaid payroll taxes, not you.

CCPC Loss Carryback: T2 Schedule 4, but then what? GIFI? Amend?

Hi Norm, No, you don’t have the amend the previous year’s tax return due to a loss-carry-back. Record the tax refund you receive in the current year as a reduction to the current corporate income tax expense.

How do I enter T5008 and T5 in the T2 return for my corporation?

Hi Eric, Report dispositions of capital property (including securities) on Schedule 6 of the T2 corporate tax return. In addition to this, report dividends received on Schedule 3 of the T2 Return. Lastly, complete Schedule 7 of the T2 Return to report all investment income, including capital gains, interest and dividends. Remember to complete the … Continue reading

do i need to pay tax from interst I earn from GIC when i am not a canada citizen nor residence

Hi Andrew, Interest payments made by a non-arms-length person/entity (including a financial institution) to a non-resident of Canada are not subject to a non-resident withholding tax. In other words, the interest income received is not taxable in Canada.

Non-resident spouse came back to Canada for 5 months

Hi Zeeshan, Report the actual rent collected in the year and the taxes remitted based on the rent collection. Expenses for the whole year can be deducted if you make reasonable efforts to rent the unit.

oas received in Portugal?

Hi David, As a non-resident of Canada, you can receive OAS payments so long as you resided in Canada for at least 20 years starting from age 18.

Non-Resident with Canadian Rental Property

Hi There, A spousal rollover is not available for non-residents and so your spouse’s death will result in a deemed disposition of the property to the extent of your spouse’s ownership interest. If your spouse owned 50% of the property at the time of her death and the total gain is $800,000, then her share … Continue reading

CEBA loan Tax Treatment

Hi Jignesh, The forgivable portion of the loan is taxable in the year that the loan is received. A tax deduction of the forgivable portion is allowed in the year that the loan is repaid. The fee to prepare a corporate tax return is $1,650.

Income tax while working in USA

Hi there, Generally speaking, if you move to the US on a permanent basis and maintain no primary ties to Canada (house available for your personal use, children, spouse), then you are a non-resident of Canada and a resident of the US. As a non-resident of Canada, you must pay a non-resident tax equal to … Continue reading

Repatriation

Hi Sandy, Prepare a gift letter, signed by both you and your parents, stipulating that the amount is a gift. Keep the gift letter for your records in case the CRA asks for verification of the source of the gifted funds. If the money is held in a foreign bank account belonging to you, then … Continue reading

change in use of principal residence

Hi Sammad, The 45(2) election must be filed for the year in which the change in use of the property occurs. My understanding is that the CRA will not accept a 45(2) election that is filed past the due date.

Gift from Parents in India

Hi Krithi, From a Canadian perspective, you do not have to pay income tax on the gift received. If your parents are non-residents of Canada, they also have no tax payable to the CRA on the sale of the property. Note: your parents will likely owe Capital gains tax to the Indian taxation authorities.

Gifting Corporation owned Real Estate to a Relative/ Non-Relative

Hi Paul, When a taxpayer makes a gift of property / shares, the taxpayer is deemed to have ‘sold’ the property / shares for their fair market value at that time. This can trigger a capital gain. It does not matter if the recipient of the property / shares is a relative or a third … Continue reading

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