Canadian Money Forum - Taxation http://canadianmoneyforum.com/ Tax tips, facts and questions en Wed, 22 May 2013 19:13:18 GMT vBulletin 60 http://canadianmoneyforum.com/images/misc/rss.png Canadian Money Forum - Taxation http://canadianmoneyforum.com/ Which taxation year for utility bill? What about credit on bill account? http://canadianmoneyforum.com/showthread.php/15575-Which-taxation-year-for-utility-bill-What-about-credit-on-bill-account?goto=newpost Wed, 22 May 2013 17:19:18 GMT I believe, for taxation purposes, you expense in the month the services were rendered, correct? 1. Business telephone line service for December... I believe, for taxation purposes, you expense in the month the services were rendered, correct?

1. Business telephone line service for December 2012, altho invoice comes out in January 2013 and actual payment isn't made until possibly February 2013, the expense is still written in for December of 2012, correct?

2. What if, for the above scenario, provider had also credited the account and thus the invoice is zero'd out or has a credit, what do I expense for the bill's month?

3. Transit (i.e. GO Train) being self-employed, do I write it off or is there no difference from claiming it under personal "transit tax credit" line?

Thanks in advance :) ]]> Taxation motd http://canadianmoneyforum.com/showthread.php/15575-Which-taxation-year-for-utility-bill-What-about-credit-on-bill-account Investment fund structure http://canadianmoneyforum.com/showthread.php/15571-Investment-fund-structure?goto=newpost Tue, 21 May 2013 21:05:56 GMT I am looking at pooling investor money to start something similar to a hedge fund, that I would manage. The fund will be rather small, somewhere... I am looking at pooling investor money to start something similar to a hedge fund, that I would manage. The fund will be rather small, somewhere between $250,000 and $500,000. Given the small size of the fund, I will not make significant money, as such I am trying to keep my expenses to a minimum. I plan on structuring this project and writing all legal contracts myself. I have written a 15 page information package, all necessary contracts, and incorporated. The last step before I actually raise money is to ensure my understanding of the tax regulations are correct, given my small size I don't want to pay a lawyer $500/hour to review. I called the CRA business help line and ran my plans by them, they did not know the answer. I was forwarded to a senior agent at the CRA who also did not know the answer. I was told I should ask a tax auditor and was given a fax number. I faxed my questions to them 2 weeks ago and am still waiting for a response. While I wait for the CRA's response, I was wondering if anyone on CMF has any experience in these matters and could provide some insight. Below is what I faxed to the CRA.

Quote:
I am looking to pool investor funds to invest in publicly traded securities.

Investors will purchase units in a joint venture (“JV”). Since joint ventures cannot borrow money or open trading accounts, the funds of the joint venture will be given to a nominee company (“NC”). The NC will open a trading account at an online brokerage, and trade the funds on behalf of the JV. A legal agreement will be signed between the JV and the NC indicating that the funds given from the JV to the NC, and all resulting profits and losses generated by the funds, belong to the JV. The NC will not report any revenues or expenses for tax purposes, from a tax perspective the NC does not possess anything, it merely holds the funds on behalf of the JV. Since a JV is not a taxable entity, all gains and losses incurred will be attributed annually to the JV unit holders based on the number of units they own in the joint venture.

My goal in operating the JV through this structure is to have my investors pay taxes on the investment gains and losses in the same amount as if they were to be investing their funds personally. For instance, let’s assume the JV generates the following during the tax year 2013:

Capital gains - $100,000
Dividends - $50,000
Expenses^- $10,000

^Expenses include trading commissions, banking fees and management fees

Let’s further assume that an investor owns 1 out of 20 equally weighted JV units (5% ownership). The investor would then report the following on their 2013 personal tax return:

Capital gains $5,000 ($100,000 x 5%)
Dividends $2,500 ($50,000 x 5%)
*Expenses incurred $500 ($10,000 x 5%)

*Note that if the investor is providing me with borrowed funds, they would include in this amount any interest charges they incurred

For running this JV, I will be charging a fee based on the performance of the JV. From the perspective of the JV, any fees paid to me will be included in expenses. From my perspective, any fees I receive will be included in my 2013 personal tax return as business income, against which I will deduct the expenses I incur running this JV (home office expenses, CCA on a computer etc.)

Is my understanding of the taxation rules correct?
Any insight would be much appreciated.

-Ethan ]]> Taxation Ethan http://canadianmoneyforum.com/showthread.php/15571-Investment-fund-structure <![CDATA[T2125 - "New to self employment" basic questions - please help!]]> http://canadianmoneyforum.com/showthread.php/15569-T2125-quot-New-to-self-employment-quot-basic-questions-please-help!?goto=newpost Tue, 21 May 2013 17:23:23 GMT I am full time employed (Over 50k) + run a sole proprietor tutoring business from my home. My husband is regular full-time employed (Over 50k). ... I am full time employed (Over 50k) + run a sole proprietor tutoring business from my home. My husband is regular full-time employed (Over 50k).

Is commercial insurance on vehicle necessary to claim motor vehicle expenses for tutoring business? I have default autoplan insurance on it for now.

I use all the money earned from business for personal use, does this mean the Drawings section ( T2125 - 9932) will be total income from the business? How will this affect the tax return?

Can CCA Claim in T2125 be left blank? Can it be zero? How will this affect the tax return?

I registered my business in May 2013, licensing in progress should be completed by June 2013. What is my fiscal period? Do I need to fill the reconciliation form? I would prefer not to change the year if not necessary.

The From-to date for business in T2125 will be from date of registration or date of licensing, since I'll open business to clients after getting permits, etc.


Thanks for your help! ]]> Taxation ashsriniindia http://canadianmoneyforum.com/showthread.php/15569-T2125-quot-New-to-self-employment-quot-basic-questions-please-help! transferring income to spouse http://canadianmoneyforum.com/showthread.php/15565-transferring-income-to-spouse?goto=newpost Mon, 20 May 2013 16:45:44 GMT Hi,

I'm a full-time employee (not on a contract). My wife and I are both electrical engineers. My wife has been on maternity leave in 2012. Sometimes I bring some of my work to do at home over the weekends and my wife sometimes helps me doing that.
My question is now this: can I transfer some of my income (let’s say the bonus that I received in 2012 for my extra work) to her in order to maximize our overall tax refund?

Thanks. ]]> Taxation khansari http://canadianmoneyforum.com/showthread.php/15565-transferring-income-to-spouse My tax problem http://canadianmoneyforum.com/showthread.php/15560-My-tax-problem?goto=newpost Sun, 19 May 2013 19:58:14 GMT I have to start a new thread. The old one requires someone to read from start to finish before they can give relevant information so it's just turning into a driveby where people reply to other peoples' mistaken replies.

I hadn't filed taxes in 3 years. I have chronic depression and anxiety disorder so it's difficult to work steadily and I move around a lot etc. I have no assets, no credit history, no responsibilities really.
A few months ago CRA sent me a notice that I needed to file for 3 years of taxes. During those three years I worked on various construction jobs where I was paid as a subcontractor and I think I had one 6 month stint working in an office with deductions.
It would be nearly impossible for me to round up all my information as I'm very bad at record keeping and it would be very difficult to even remember what companies I worked for doing construction over the years.
I waited for the CRA's assessment and they say I owe $12,000.00. The assessments were late getting to me so I also received a letter reminding me I need to pay that $12,000 before someone finally gave me the actual assessments.

I thought I would get all the information they had on file with the assessments but it just looks like final numbers. I'm not even sure what jobs I held in each year.
So I guess I need to do my own taxes now and see if their assessment is accurate before I figure out what to do. Can I get this information online now that I've got the assessments?
If anyone knows how CRA does these assessments of delinquent filers and can shed some light on the process I'd like to hear it.
I'm curious to know if they intentionally leave out any operations that would work out in your favor and if so which ones?

And also what's the best solution for someone who is going to be unable to pay $12,000 or make payments for at least a few months (should that turn out to be close to accurate) and does not want a frozen bank account or interest adding more and more to the debt. ]]> Taxation JohnnyT http://canadianmoneyforum.com/showthread.php/15560-My-tax-problem Stock Warrants and Superfical Loss Rule http://canadianmoneyforum.com/showthread.php/15554-Stock-Warrants-and-Superfical-Loss-Rule?goto=newpost Sat, 18 May 2013 17:01:40 GMT Are stock warrants and the underlying stock considered "identical properties" for superficial loss rules. e.g GoldCorp stock and Goldcorp warrants.
Thanks for any info. ]]> Taxation Skye http://canadianmoneyforum.com/showthread.php/15554-Stock-Warrants-and-Superfical-Loss-Rule Charging GST and PST for services rendered , small business http://canadianmoneyforum.com/showthread.php/15541-Charging-GST-and-PST-for-services-rendered-small-business?goto=newpost Fri, 17 May 2013 12:48:10 GMT My wife has started a professional coaching business and she will be creating invoices for her clients . As a resident of Quebec does she need to... My wife has started a professional coaching business and she will be creating invoices for her clients . As a resident of Quebec does she need to charge GST and PST?

We will seek the advice of an accountant shortly but I just wanted some quick feedback as she has started to gain clients.

Thanks in advance. ]]> Taxation $teve http://canadianmoneyforum.com/showthread.php/15541-Charging-GST-and-PST-for-services-rendered-small-business What is needed for a person tax reciept from a private seller to a business? http://canadianmoneyforum.com/showthread.php/15532-What-is-needed-for-a-person-tax-reciept-from-a-private-seller-to-a-business?goto=newpost Thu, 16 May 2013 04:29:22 GMT Some times, a private seller will sell something, I can use for my business. I want to know, what is the info needed from the seller, so in the event... Some times, a private seller will sell something, I can use for my business. I want to know, what is the info needed from the seller, so in the event CRA wants to know, it wont be a problem? Is there a private invoice template the seller needs to fill out and provide me a copy? can he download something from the internet?

Thanks much! :) ]]> Taxation justloren http://canadianmoneyforum.com/showthread.php/15532-What-is-needed-for-a-person-tax-reciept-from-a-private-seller-to-a-business Tax on selling condo http://canadianmoneyforum.com/showthread.php/15528-Tax-on-selling-condo?goto=newpost Wed, 15 May 2013 04:52:57 GMT Hi all,

I'm currently living in a condo but I have bought a house and will be moving in next month. I originally planned to rent the condo out, but after some calculation, it seems I'll be taking a loss renting at a reasonable price. Therefore I'm looking at selling the condo.

The condo has been my primary residence, but it won't be after next month. I know if I'm selling a property that's not my primary residence, capital gain tax will apply. I'm wondering how long do I have before the condo is deemed not a primary residence? For example, if I list the condo now, and it takes a month or two to close the deal, will CRA be on my back since I will be living in the house for a month before the condo is sold?

I appreciate any inputs.

Thanks, ]]> Taxation veshiote http://canadianmoneyforum.com/showthread.php/15528-Tax-on-selling-condo Home office Reno Tax Deduction? http://canadianmoneyforum.com/showthread.php/15520-Home-office-Reno-Tax-Deduction?goto=newpost Mon, 13 May 2013 14:31:54 GMT I suspect this may have come up in earlier discussions but couldn't find anything in the forums.
If I put an addition on my house to allow for an office for my business, is any portion of the renovation tax deductible? ]]> Taxation Rainey http://canadianmoneyforum.com/showthread.php/15520-Home-office-Reno-Tax-Deduction Canadian investing in US http://canadianmoneyforum.com/showthread.php/15517-Canadian-investing-in-US?goto=newpost Mon, 13 May 2013 04:23:44 GMT I'm a Canadian with US$ to invest in a non-registered account and a TFSA.

I believe that if I invest on a US exchange, even in my TFSA, there are withholding taxes applied. Correct?

Also, in my non-registered account, does it make any difference what type of investment I hold? For example, I know that in Canada bonds are fully taxed and should therefore be held in the registered account. Also monies received from preferred shares are a capital gain and are preferentially treated from a taxation point-of-view and therefore should be held in a non-registered account. Would any of this apply to similar investments in the states?

Thanks, ]]> Taxation willow1044 http://canadianmoneyforum.com/showthread.php/15517-Canadian-investing-in-US Unclaimed charitable donations http://canadianmoneyforum.com/showthread.php/15491-Unclaimed-charitable-donations?goto=newpost Thu, 09 May 2013 16:23:52 GMT I have been accumulating receipts from charitable donations for 5 years. I was about to enter them in my return but I'm not sure if I can do that. Did I have to claim and carry forward those receipts in the year I received them or can I just claim them all now in one lump sum?

Thanks, John ]]> Taxation fryman http://canadianmoneyforum.com/showthread.php/15491-Unclaimed-charitable-donations rental house sold, capital gains questions http://canadianmoneyforum.com/showthread.php/15480-rental-house-sold-capital-gains-questions?goto=newpost Tue, 07 May 2013 12:27:06 GMT Hi guys, very excited about this forum! So glad I found it.

I have a rental home which has burned down. I'm planning on taking the insurance money, paying off the mortgage and then selling or holding the land. I end up making more this way than rebuilding and then selling or renting out again. I have never lived in this home as it was a rental property from day 1. I have a few questions about the capital gains tax and how it will apply to this situation

1. How will they figure out my capital gain? The insurance money is not taxable, or is it?

2. I have a friend who works for CRA who told me that if I have never had a capital gain then I would be exempt from the first $300,000 but I can't find any information about that. I was only able to find info about the 750k exemption for farmers. If there is one that applies to me that would be great.

3. On a separate note, can you just move into a home and make it your primary residence just to avoid paying the gains tax? That hardly seems fair. Or does that only work on the gain from the date you move in to the date you sell and you still have to pay the gains tax from the date or purchase to the date you moved in? I've always wondered about that.

thank you

*edit, title says rental house sold.. should read "rental house burned down" ]]> Taxation thotho http://canadianmoneyforum.com/showthread.php/15480-rental-house-sold-capital-gains-questions uFile 2012 - How to delete blank T forms http://canadianmoneyforum.com/showthread.php/15473-uFile-2012-How-to-delete-blank-T-forms?goto=newpost Mon, 06 May 2013 12:11:18 GMT I noticed that with the 2012 uFile software, I have ended up with T3 & T5 forms with last year's labels that are blank plus a second set with the 2012 numbers in them. I'm thinking the import of my 2011 tax return created the blank ones, where I created the new ones as I did not notice the blank ones.

Anyone know how to delete the duplicate T forms?


Cheers ]]> Taxation Eclectic12 http://canadianmoneyforum.com/showthread.php/15473-uFile-2012-How-to-delete-blank-T-forms Remote work for US employer - who is responsible for tax? http://canadianmoneyforum.com/showthread.php/15449-Remote-work-for-US-employer-who-is-responsible-for-tax?goto=newpost Thu, 02 May 2013 16:15:40 GMT I'm a Canadian citizen, living in BC, and I am about to start working (remotely) for a US company. This is full-time work, under a contract, which dictates salary, vacations etc. As I read the definition

of employee specified by the CRA , I will be an employee, and not self-employed.

However, my contract includes the following:
Quote:
Because you are not a United States resident, you will, on paper, be treated as Contractor. You will be responsible for tax obligations as well as ancillary
employment benefits such as health care.
Firstly, is this allowed?

And secondly, if it is allowed, how would I apply this to my next tax return?

Thanks in advance for any advice. ]]> Taxation Uprightdog http://canadianmoneyforum.com/showthread.php/15449-Remote-work-for-US-employer-who-is-responsible-for-tax