Tax Issues

Total 360 Posts

Some Ins and Outs of RRSPs & RRIFs Transfers on Death

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Generally the RRSP or RRIF of a deceased can be transferred by specific bequest under the terms of the deceased’s will to a qualifying survivor tax-free. A qualifying survivor would be the deceased annuitant spouse or common-law partner or a financially dependent child or grandchild. When payments from a deceased annuitant’s RRSP are paid to the annuitant’s estate and a qualifying survivor is a beneficiary of  the estate, the deceased….

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Canada Revenue Agency, Estate Administration, Estate Planning, Executors, Investments, Property, RRSP, Tax Issues, Uncategorized, Wills

Business purpose, source of income, and sham gets a thorough review

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In a recent court case (Paletta Estate v. The Queen) the estate successfully appealed that it was entitled to $55 million in losses in the 2000 to 2006 taxation years generated through forward foreign exchange trading. The estate purchased straddled forward foreign exchange contracts – one long and one short. The taxpayer closed the loss leg of the straddle before the end of the year (realizing a loss in the….

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Canada Revenue Agency, Tax Issues

Inconsistency in CRA policy for dividends paid to a deceased beneficiary

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A recent article discussed taxation anomalies that occur due to timing differences between when a trust receives a dividend and subsequently pays and allocates a dividend to a beneficiary. CRA view 2016-0647621E5 provides that when a trust receives a dividend in the year and subsequently pays and allocates the dividend to a beneficiary in the same year, the allocation of the dividend for tax purposes occurs on December 31 of the year because….

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

What is a Reasonable Error

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Further to my last post, the Canada Revenue Agency (“CRA”) does have the discretion to waive tax penalties on excess (or deemed to be excess) contributions to Tax Free Savings Accounts (“TFSA’s) and Registered Retirement Savings Plans (“RRSP”) if an excess contribution  to a TFSA or RRSP resulted from a reasonable error under the applicable sections of the Income Tax Act (“ITA”). With regard to TFSA’s, it would be for….

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Estate Planning, In the News, Investments, Property, Tax Issues, Uncategorized

Disability Tax Credit

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The 2021 Federal Budget included proposals that would see an expansion of the Disability Tax Credit to more Canadians. The Disability Tax Credit (DTC), with a value of $1,299 for 2021, is a non-refundable credit intended to offset the impact of disability-related costs. In order to claim this credit, a taxpayer must have a certificate confirming they have a severe and prolonged impairment in physical or mental function, or be….

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Canada Revenue Agency, Capacity Law, Caregiving, Disability, Elder Care, Estate Administration, Estate Planning, Executors, Tax Issues

Bill C-208 the race to the finish line

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Bill C-208 (Bill), “an Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)” is a private member’s bill introduced by Conservative MP, Larry Maguire[1] on February 19, 2020.  The purpose of this Bill is to allow share capital restructurings and inter-generational transfers within a family unit, which are sometimes caught by two prominent anti-avoidance provisions in the Income Tax Act (ITA), Sections 55….

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Business Succession Planning, Tax Issues
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