Tax Issues

Total 360 Posts

AMENDING TAX ELECTIONS AFTER THE FACT

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The rollover provisions of the Income Tax Act, under subsection 85, permit a taxpayer to elect to transfer “eligible property” to a taxable Canadian corporation in exchange for consideration that includes at least one share of the corporation. “Eligible property” includes most capital property, Canadian or foreign resource property, eligible capital property and inventory, other than inventory that is real property. Where the taxpayer and the corporation agree upon an….

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Canada Revenue Agency, Estate Planning, Investments, Small Business, Tax Issues, Trusts, Uncategorized

Bill C-208: The saga continues…

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On June 29, 2021, the Private Member’s Bill C-208, regarding the transfer of small businesses and family farm or fishing corporations (the Bill), received Royal Assent. The Bill limits the application of section 84.1 on inter-generational business sales. Avoiding section 84.1 allows the vendor to receive capital gains treatment on a non-arm’s length disposition of shares and potentially use the lifetime capital gains exemption (LCGE) to shelter any gain from tax. On….

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Canada Revenue Agency, Tax Issues

The medical expense tax credit: COVID-19 tests and vaccines

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With the requirements for COVID-19 tests for entry into Canada and vaccines, the Canada Revenue Agency (CRA) was asked to comment on the availability of the medical expense tax credit (METC). Medical expenses which are eligible for the METC are limited to those described in our tax rules. If a particular expenditure is not described as an eligible medical expense, or if the conditions under which the expenditure would qualify….

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Canada Revenue Agency, Costs, Elder Care, Executors, Geriatric Care Management, Healthcare, Tax Issues, United States

The Finance Strikes Back

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As the story of Bill C-208 (intergenerational transfers) continues to evolve, I can’t help but make analogies to my favorite childhood trilogy.  The Star Wars trilogy was a dominating force in my childhood.  I lived and breathed the interesting stories produced by this vast universe created by George Lucas. In comparison to Star Wars, our vast tax universe also produces interesting stories. The latest story involves the private member’s bill,….

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Business Succession Planning, Tax Issues

Tax on principal residence? How to plan for a change of use

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No, the government did not eliminate or claw back the principal residence exemption in the 2021 Budget, as had been speculated. Yet, there is a circumstance in which a taxpayer could face an unexpected tax burden in respect of a principal residence: when there is a change in use of a property. AS an executor, the expectation of a tax-free receipt on the sale of what was the deceased’s home may….

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Canada Revenue Agency, Estate Planning, Executors, Property, Tax Issues

Company purification – don’t take the short-cut

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If a business is successful, it will eventually have excess cash retained in the company that is not necessary for the operations of the business.  Two options for this cash is to distribute the excess to the shareholder(s) as a dividend, but that would result in personal tax being paid by the shareholder on the dividend or the company can simply retain the excess cash and invest it in non-business-related….

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Tax Issues
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