Form 1135 is where Canadians report foreign property that exceeds $100,000 CAD. There is no obligation to pay tax but failing to file the T1135 can result in penalties of up to $2,500 per tax year. There is still some grey area when it comes to the T1135 and cryptocurrency. There are two factors in […]

There are two ways that a Canadian Citizen can be deemed a U.S Resident for Tax Purposes: Green Card Test: If you are lawfully a permanent resident than you are deemed a resident Substantial Presence Test: If you are present in the U.S at least 31 days in the current year, and At least 183 […]

HST is the combination of the Provincial Sales Tax (P.S.T) and Government Sales Tax (GST). For Ontario, it is the combination of 7% and 6% to make the HST rate for Ontario 13%. Depending on which province you live in, the sales tax rate may vary. Some provinces only charge GST and some have a […]

Shareholders can withdraw funds from their corporations by way of salary, dividends, returns of capital and management fees. They may also do so as an independent contractor should they qualify. This is called a Shareholder Loan. There are many provisions in the Income Tax Act to prevent shareholders abusing this. If a withdraw is made […]

The Section 85 Rollover is a technique that allows taxpayers to defer all or part of their income which would normally be taxed on. This allows the taxpayer to defer paying taxes on any assets that are transferred. These assets include eligible property like capital property, Canadian and foreign property, some inventory, and real estate. […]

Many business that operates as a sole proprietor/self employed sometimes find that they are making more money than anticipated. It may be in their best interest to consider going from sole proprietor to an incorporation. Having said this, many sole proprietors accumulate assets through time and it’s good to know which assets are transferrable to […]

Principal Residence When you dispose of a property that has been your principal residence for X amount of years, you will need to report the disposition to the CRA when you file your income tax. The good news is that the Government of Canada allows the taxpayer to be exempt from paying any capital gains […]

The simple definition of a real estate assignment is that contractual rights to a piece of property are assigned from one party to another. This means that before the legal ownership of a property is transferred, the buyer would purchase the rights from the seller and builder. The tax implications are whether to claim the […]

Withholding Tax – Non-Resident When we talk about withholding tax for non-tax residents of Canada, the general tax rate is 25% of the gross amount received. This means that passive sources of income, such as rent, royalties and dividends under the Canadian Income Tax Act are taxable. This means that the Canadian resident who is […]

In order to qualify as a non-profit organization, the following must be met: Not a charity Organized for the purpose of civic improvement, social welfare, pleasure, or recreation Operates for the purpose of civic improvement, social welfare, pleasure, or recreation No income is available to members, shareholders, or proprietors. Both non-profit organizations and charities share […]