Davidow & Nelson Blog

What Happens When It Goes Bad?: LOANS TO A RELATIVE’S BUSINESS

You’ve loaned money to a family member’s corporation. Perhaps it was an investment, maybe it was a favor, or both. Or, perhaps, it was made for a completely separate reason. Regardless, sometimes the loan may go bad and you are not able to collect on the debt. What happens from a tax perspective when this… Read more »

A Growing Industry: MARIJUANA

As the legislation to legalize marijuana for non-medical purposes works its way through parliament (Bill C-45 entered the Senate phase on November 27, 2017), producers, vendors, regulators, enforcement, and potential customers are seriously considering the implications. Although it has been expected legalization would occur by July, 2018, the timeline is not certain (as the Senate… Read more »

Checking Up On Suppliers: INPUT TAX CREDITS

Do I have to check up on a supplier when paying them GST/HST? Yes!In a January 29, 2016 Tax Court of Canada case it was noted that CRA had denied over $500,000 of input tax credits (ITCs), and assessed penalties and interest, in respect of GST and QST paid to twelve suppliers. Unknown to the… Read more »

Where Are We Now?: INCOME SPRINKLING

On December 13, 2017, the Department of Finance released a number of updates relating to the income sprinkling proposals (originally announced on July 18, 2017). Below is a summary of the proposals as they are currently drafted.Individuals that receive certain types of income derived from a “related business” will be subject to Tax on Split… Read more »

TAX TICKLERS… some quick points to consider…

Of the approximately 28 million personal tax returns filed for the 2016 year, 58% got refunds. 68% received them by direct deposit. The average refund was $1,735. Only the last year of CPP survivor benefits can generally be accessed for late applications. Don’t delay submission. Effective December 3, 2017, parents will be able to choose… Read more »

Tax and Filing Requirements: SUPPORT OF REFUGEES

Two Technical Interpretations (May 26 and March 3, 2017) considered whether support provided to a refugee would be required to be reported on a Form T5007, Statement of Benefits.Essentially, the CRA considered whether the support would constitute “social assistance” which would require a T5007. If the amount is not considered “social assistance”, no T5007 would… Read more »

Impact on Tax Refunds or Credits:NON-COMPLIANT GST/HST REGISTRANTS

In a recent release (Excise and GST/HST News No. 102), CRA reminded taxpayers that they may place a non-compliance hold on a taxpayer’s account if they are a non-compliant GST/HST registrant. That is, for example, if income tax or GST/HST returns are outstanding. This would prevent the provision of any refund or credit to the… Read more »

The IRS is Targeting Smaller Foreign Entities: OPERATING A BUSINESS IN THE U.S.

The IRS has recently noted that they are rolling out campaigns to focus on entities below the “big fish” that have historically been targeted. Such campaigns include: Related party transaction campaign – a redefined focus on mid-market entities to determine compliance with U.S. transfer pricing requirements. Inbound distributor campaign – reviewing whether S. affiliates distributing… Read more »

Who Can Manage the Deceased’s Tax Affairs?: DYING WITHOUT A WILL

Where a family member of a deceased individual would like to be recognized by CRA as the person or persons who will manage the tax affairs of the person who died without a last will and testament, they can now do so by completing a CRA Form (Affidavit for intestate situation, Forms RC549 to RC561,… Read more »