Davidow & Nelson Blog

Change in an Individual’s Circumstance: GUARANTEED INCOME SUPPLEMENT

The guaranteed income supplement (GIS) provides a monthly benefit payment to lower income individuals resident in Canada. Payments from July of one year to June of the next, are based on income of the previous calendar year (i.e. 2016 income is used to determine July 2017 to June 2018 payments).Where an individual is married or… Read more »

Can I Deduct Losses Against Other Income?: BUSINESS LOSS OR PERSONAL VENTURE

In order for an individual to apply their business loss (where reasonable expenses exceed revenues) to another source of income such as employment earnings (thereby reducing the overall tax liability), the taxpayer must be able to prove that they are truly running a business. That is, they have to show that the undertaking was in… Read more »

TAX TICKLERS… some quick points to consider…

An individual’s online CRA account (My Account) is now linked to their online Service Canada Account (EI, CPP, OAS, etc.) to provide both departments’ information in a single log-in session. Over the past two years, CRA has completed over 21,000 files related to real estate, assessing over $329 million in previously unreported income, and applying… Read more »

The World is Shrinking: CRA STRATEGIES ON OFFSHORE TAX EVASION

A recent article reported that CRA is reviewing every electronic fund transfer over $10,000 from Canada to four foreign jurisdictions per year. The first two targets were the Isle of Man and the Island of Guernsey, with two more undisclosed jurisdictions to be reviewed by March 31, 2017. CRA has started audits of 166 high-risk… Read more »

Not so Fast: OBJECTIONS

When filing an objection to a CRA reassessment, one of the most frequently-posed questions is “How long will it take?”. The answer, according to the Auditor General, is “too long”.On November 29, 2016, the Auditor General released a report to Parliament focusing on the effectiveness and timeliness of the objection process.Length of Process For the… Read more »

Tax Consequence: PAYROLL ADVANCES

In an April 26, 2016 Technical Interpretation, CRA opined that where an employer provides a payroll advance to an employee, the amount is not generally considered to be a loan. A salary advance is a payment for salary, wages or commissions that an employee is expected to earn in the performance of future services. These amounts are generally included in… Read more »

Financial Hardship: TAXPAYER RELIEF

CRA may grant relief from penalties and interest in cases where the timely satisfaction of a tax obligation was not completed due to: extraordinary circumstances; actions of the CRA; or inability to pay or financial hardship. In a March 31, 2016 Federal Court Judicial Review, the taxpayer appealed a decision by CRA to refuse relief on penalties… Read more »

A Taxable Benefit?: MEAL REIMBURSEMENTS

In June 10, 2016 French Technical Interpretation, CRA commented on whether an employer had conferred a benefit to an employee where the employee was reimbursed for their meal expenses.Generally, an employee must include the value of any benefits received or enjoyed in their taxable income. CRA normally considers a taxable benefit to be conferred when: the benefit provides an economic advantage to the employee; the… Read more »

Requirements for Deduction: EMPLOYMENT EXPENSES

In a May 26, 2016 Technical Interpretation, CRA summarized the conditions that must be met in order for an individual that earns employment income to deduct employment expenses. Deductible expenses are limited to only a select group described in the Income Tax Act.Generally, an employee may deduct costs of employment related expenses if: under the contract of employment, the employee… Read more »

Changes to Reporting: PRINCIPAL RESIDENCE EXEMPTION (PRE)

On October 3, 2016, Minister of Finance Bill Morneau announced a number of measures to address perceived abuses of the PRE. The PRE essentially allows gains experienced upon the sale of a principal residence to be tax free. Here are some of the major changes.Reporting the Sale of a Principal Residence While the legislation has always… Read more »