http://www.mnp.ca/media-centre/blog/tags/income-taxIncome Tax Blog Post RSS FeedCopyright 2012MNP All rights reserved.What are the GST implications if you are a non resident and purchase a rental property in Canada? Are you a non resident thinking of investing in Real Estate in Canada? There are various tax implications to owning real estate in Canada.http://www.mnp.ca/en/media-centre/blog/2009/6/2/non-residents-purchasing-real-estate-in-canada-part-i/Tue, 02 Jun 2009 00:00:00 GMTDo you own a vacation property that you have in a rental pool but also use personally? Did you register for GST so that you would not have to pay the GST when you purchased the rental property?http://www.mnp.ca/en/media-centre/blog/2009/6/4/non-residents-purchasing-real-estate-in-canada-part-ii/Thu, 04 Jun 2009 00:00:00 GMTWhenever I sit down with a client to discuss their business structures, a major concern that always pops up is post-retirement cash flow. Quite often our discussions will lead to the topic of individual pension plans.http://www.mnp.ca/en/media-centre/blog/2009/8/4/the-individual-pension-plan-part-i/Tue, 04 Aug 2009 00:00:00 GMTThe IPP has many practical applications to reward key personnel and shareholder-managers.http://www.mnp.ca/en/media-centre/blog/2009/8/10/the-individual-pension-plan-part-ii/Mon, 10 Aug 2009 00:00:00 GMTMany people wonder when it’s the right time to incorporate their farm partnership. The reason to incorporate a farm can be different for each farm family; however one of the primary reasons is often to gain access to the small business deduction available in the corporation.http://www.mnp.ca/en/media-centre/blog/2009/9/28/incorporating-your-farm-partnership/Mon, 28 Sep 2009 00:00:00 GMTIf you have a small consulting business in Canada, you have probably heard something about personal services businesses (PSB) either from your accountant or in the local coffee shop. http://www.mnp.ca/en/media-centre/blog/2009/10/5/the-personal-services-business/Mon, 05 Oct 2009 00:00:00 GMTLet’s face it – no one really likes to trigger losses, but the silver lining of triggering a loss is that losses can actually help your tax situation.http://www.mnp.ca/en/media-centre/blog/2009/11/16/tips-and-traps-regarding-capital-losses/Mon, 16 Nov 2009 00:00:00 GMTSpousal loans are a great way to implement income splitting between two spouses, where one spouse is in a higher tax bracket than the other spouse. Generally, spouses are not able to split income to reduce their tax bill unless specifically allowed under the Income Tax Act.http://www.mnp.ca/en/media-centre/blog/2010/3/18/income-splitting-with-spousal-loans/Thu, 18 Mar 2010 00:00:00 GMTWho would have thought US healthcare reform would have such a unique and profound effect in Canada? Buried in the details of “The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act” is a hidden provision that may well change how Canadian Corporations are taxed by the Internal Revenue Service (“IRS”).http://www.mnp.ca/en/media-centre/blog/2010/8/11/irs-uses-us-healthcare-to-catch-non-compliant-canadian-taxpayers-universal-coverage-may-have-new-meaning/Wed, 11 Aug 2010 00:00:00 GMTA significant amount of your tax dollars are going to health care. As the population ages, health care costs will increase. At the same time, paying for health care impacts the government’s ability to invest in agriculture and agri-food programs. http://www.mnp.ca/en/media-centre/blog/2010/9/22/leveraging-government-agri-food-policy-to-control-health-care-costs/Wed, 22 Sep 2010 00:00:00 GMTWhen the current generation wishes to transfer growth to the next generation to limit the exposure to taxes on death, they will almost always look at using an estate freeze. If the individuals own assets personally that are accruing value, the assets would normally be transferred to a corporation to effect the estate freeze.http://www.mnp.ca/en/media-centre/blog/2011/1/11/deviations-on-the-typical-estate-freeze/Tue, 11 Jan 2011 00:00:00 GMTAfter much speculation, anticipation and the usual political rhetoric, the US Congress finally passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The Act will affect most US taxpayers, including the many Canadian individuals and businesses that are subject to US taxation.http://www.mnp.ca/en/media-centre/blog/2011/1/19/us-tax-relief-unemployment-insurance-reauthorization-and-job-creation-act-of-2010/Wed, 19 Jan 2011 00:00:00 GMTHappy New Year from the Canada Revenue Agency. With a lead-in line like that, you know it can’t be good – and it isn’t.http://www.mnp.ca/en/media-centre/blog/2011/1/21/cra-coming-for-unpaid-138-million/Fri, 21 Jan 2011 00:00:00 GMTGiven the significant increases in land and quota values over the last number of years, it is becoming increasingly difficult to transfer the family farm at fair market value. This tax-deferred rollover can be an invaluable tool in succession planning and benefit future generations.http://www.mnp.ca/en/media-centre/blog/2011/1/26/transitioning-the-family-farm/Wed, 26 Jan 2011 00:00:00 GMTFrom a U.S. income tax perspective, certain rules apply to Canadians wintering in the U.S. Here's what you need to know.http://www.mnp.ca/en/media-centre/blog/2011/2/1/canadians-wintering-in-the-us/Tue, 01 Feb 2011 00:00:00 GMTLike many Canadians, you may be considering making a charitable gift as a component of your Estate Plan. Not only is there the philanthropic benefit, but the donation credit can result in beneficial tax results.http://www.mnp.ca/en/media-centre/blog/2011/2/8/using-charitable-donations-in-your-estate-plan/Tue, 08 Feb 2011 00:00:00 GMTOn Tuesday, February 15, 2011, the BC Minister of Finance, Colin Hansen, presented the Province’s 2011 Budget. The Budget Speech proclaimed it the “status quo” budget, reaffirming the government’s pledge to fund vital public services while continuing to practice prudent fiscal management.http://www.mnp.ca/en/media-centre/blog/2011/2/15/bc-budget-announcement-2011/Tue, 15 Feb 2011 00:00:00 GMTFor employers in Northern Canada, there is an opportunity to help employees with the travel component of their Northern Residents Deduction.http://www.mnp.ca/en/media-centre/blog/2011/2/17/maximizing-the-northern-residents-deduction/Thu, 17 Feb 2011 00:00:00 GMTFamily trusts can be very useful income tax planning tools. Trusts can allow income to be split between the various beneficiaries, thereby utilizing the lower tax brackets of the beneficiaries. However, care must be taken to ensure that the trust is not subject to reversionary trust rules of the Income Tax Act.http://www.mnp.ca/en/media-centre/blog/2011/3/4/is-your-family-trust-subject-to-reversionary-trust-rules/Fri, 04 Mar 2011 00:00:00 GMTWant to support a favorite Canadian registered charity but find yourself short on cash? If you have shares in a public company that have appreciated in value, you could sell the shares and donate the cash to the charity. Donating the shares directly is another way of getting an even greater tax credit.http://www.mnp.ca/en/media-centre/blog/2011/3/8/donations-of-marketable-securities/Tue, 08 Mar 2011 00:00:00 GMTMany payers are not aware of the various withholding requirements related to payments made to non-residents and that it is the payer that bears the burden of the tax if they failure to withhold the tax. I'll briefly discuss the obligations of payers regarding payments made to non-residents of Canada for services provided in Canada.http://www.mnp.ca/en/media-centre/blog/2011/3/15/obligations-of-payers-regarding-payments-made-to-non-residents-of-canada-for-services-provided-in-canada/Tue, 15 Mar 2011 00:00:00 GMTWe'll discuss how a Canadian individual can become eligible to claim the wholly dependent person tax credit.http://www.mnp.ca/en/media-centre/blog/2011/3/18/the-eligible-dependant-credit-and-shared-parenting/Fri, 18 Mar 2011 00:00:00 GMTQuebec Finance Minister, Raymond Bachand, delivered his second budget speech on Thursday, March 17, 2011.http://www.mnp.ca/en/media-centre/blog/2011/3/19/quebec-budget-announcement-2011/Sat, 19 Mar 2011 00:00:00 GMTFederal Minister of Finance James M. Flaherty delivered the Conservative government’s Federal Budget on Tuesday, March 22, 2011.http://www.mnp.ca/en/media-centre/blog/2011/3/22/federal-budget-announcement-2011/Tue, 22 Mar 2011 00:00:00 GMTFinance Minister Ken Krawetz presented Saskatchewan’s 2011 Provincial Budget on March 23, 2011.http://www.mnp.ca/en/media-centre/blog/2011/3/23/saskatchewan-budget-announcement-2011/Wed, 23 Mar 2011 00:00:00 GMTIn his Budget today, Ontario’s Finance Minister Mr. Dwight Duncan avoided making any of the “tough choices" necessary to balance the budget earlier than the planned 2018 fiscal year. His 2011 Budget contains no perceptible cuts to programs or expenditures.http://www.mnp.ca/en/media-centre/blog/2011/3/29/ontario-budget-announcement-2011/Tue, 29 Mar 2011 00:00:00 GMTEstate planning is simply not complete without considering life insurance.http://www.mnp.ca/en/media-centre/blog/2011/4/5/creative-uses-of-life-insurance-for-estate-planning/Tue, 05 Apr 2011 00:00:00 GMTFinance Minister Rosann Wowchuk presented Manitoba’s 2011 Provincial Budget on April 12, 2011. http://www.mnp.ca/en/media-centre/blog/2011/4/12/manitoba-budget-announcement-2011/Tue, 12 Apr 2011 00:00:00 GMTA trust can be a valuable tool for a family to use as part of an estate plan or for income splitting purposes. CRA is aware of these uses and seems to be focusing its audit efforts on the income splitting objectives.http://www.mnp.ca/en/media-centre/blog/2011/4/19/can-your-trust-survive-an-audit-by-the-canada-revenue-agency/Tue, 19 Apr 2011 00:00:00 GMTA financial planner contact recently brought a new client to me. The client (“Bob”) was investigating incorporating his business and wanted to understand the benefits. Bob had built his business over the last 8 years and was looking at selling within the next 5 years. He already had potential purchasers asking: “would you consider selling?”http://www.mnp.ca/en/media-centre/blog/2011/5/3/incorporating-your-business-am-i-too-late/Tue, 03 May 2011 00:00:00 GMTCanadian corporations have different tax rates depending on their size, their income, and the type of income earned. In Canada, we have a general theory that it should not matter how the income is earned, it should be subject to the same amount of tax once it has been received by the shareholder, regardless if it was earned in a company or not.http://www.mnp.ca/en/media-centre/blog/2011/5/12/salary-vs-dividends-a-brief-overview/Thu, 12 May 2011 00:00:00 GMTAn individual has $750,000 of capital gain deduction that can be used to offset capital gains realized on certain qualifying property, including land that is qualified farm property. The Income Tax Act has requirements that must be met for farmland to be considered qualified farm property.http://www.mnp.ca/en/media-centre/blog/2011/5/19/does-my-land-qualify/Thu, 19 May 2011 00:00:00 GMTPreviously, I wrote that US citizens and green-card holders who were delinquent in their US filing responsibilities generally had three choices. The IRS has added a new possibility that is much more attractive for many people.http://www.mnp.ca/en/media-centre/blog/2011/6/3/a-new-development-in-the-irs-offshore-voluntary-disclosure-initiative-affects-americans-in-canada/Fri, 03 Jun 2011 00:00:00 GMTWhether the purchaser is an arm’s length entity, group of key employees or a family member, at some point all owners of successful businesses will consider the sale of their business and the resulting tax consequences.http://www.mnp.ca/en/media-centre/blog/2011/6/21/selling-owner-managed-businesses-tips-and-traps/Tue, 21 Jun 2011 00:00:00 GMTUntil recently, the Canada Revenue Agency allowed joint ventures to establish a fiscal period that was different from the fiscal period of the venturers, where the venturers had different fiscal periods and where there was a valid business reason to justify a different fiscal period of the joint venture.http://www.mnp.ca/en/media-centre/blog/2011/7/22/a-change-in-canada-revenue-agencys-joint-venture-administrative-policy/Fri, 22 Jul 2011 00:00:00 GMTIt is not uncommon for individuals to relocate for work or studies on a short to mid-term basis. Usually the individual does not want to go through the cost or hassle of selling their residence only to return a short time later. Therefore, they may rent out their house as a way to cover operating costs or create profit during their absence.http://www.mnp.ca/en/media-centre/blog/2011/7/28/changing-your-principal-residence-into-a-rental-property/Thu, 28 Jul 2011 00:00:00 GMTIf you are contemplating the sale of your farmland and the expected capital gain will be in excess of your capital gain exemption, it is important to beware of 69(11) of the Income Tax Act in such a transaction or the resulting tax consequences will be an unpleasant surprise.http://www.mnp.ca/en/media-centre/blog/2011/8/12/farmland-and-6911-of-the-income-tax-act/Fri, 12 Aug 2011 00:00:00 GMTThe alternative minimum tax is an alternative method to calculate your taxes owing in Canada. This tax is often applicable when you have claimed a preferential tax deduction like the capital gain deduction / capital gain exemption and flow through shares or have preferential tax rates due to credits, such as dividend tax credits.http://www.mnp.ca/en/media-centre/blog/2011/8/23/what-is-the-alternative-minimum-tax-and-why-am-i-paying-it/Tue, 23 Aug 2011 00:00:00 GMTMany people today not only use their car for personal use, but also for business purposes. As such, they are entitled to get a deduction for the business portion of their vehicle's expenses.http://www.mnp.ca/en/media-centre/blog/2011/9/1/a-simplified-method-of-keeping-track-of-car-expenses/Thu, 01 Sep 2011 00:00:00 GMTA Freehold Mineral Right is Canadian Resource Property for income tax purposes and is not considered capital property; as any gain on the disposition of Canadian Resource Property either on a sale or upon death will be taxed at the 100% inclusion rate. http://www.mnp.ca/en/media-centre/blog/2011/9/16/freehold-mineral-rights-canadian-resource-property-for-income-tax-purposes/Fri, 16 Sep 2011 00:00:00 GMTThe planning relies on two key facts: First, The Income Tax Act treats a trust as a separate taxpayer and second, the Income Tax Act allows for property to roll over to a spouse on death.http://www.mnp.ca/en/media-centre/blog/2011/9/22/will-planning/Thu, 22 Sep 2011 00:00:00 GMTA question business owners often ask is whether minor children should be shareholders in the family business corporation. Usually, this is a tax motivated question, in that the higher income parents wish to access the lower marginal tax rate of their minor children.http://www.mnp.ca/en/media-centre/blog/2011/9/27/should-you-have-minor-children-as-shareholders-of-your-family-business/Tue, 27 Sep 2011 00:00:00 GMTThe Saskatchewan PST regime is certainly not without its own reporting requirements and responsibilities. Non-compliance will bring with it related penalties and interest.http://www.mnp.ca/en/media-centre/blog/2011/9/30/10-important-facts-for-non-residents-doing-business-in-saskatchewan/Fri, 30 Sep 2011 00:00:00 GMTMaximizing RRSP or IPP contributions has long been considered an obvious investment axiom. However, you have to be wary of the rules of thumb, and in the case of the choice of investing through an RRSP or IPP vs investing corporately there are many variables that can impact on reaching the right decision.http://www.mnp.ca/en/media-centre/blog/2011/10/8/rrsps-much-ado-about-nothing/Sat, 08 Oct 2011 00:00:00 GMTIt’s never easy when a client tells you they are splitting from their spouse. Although we can’t reduce the emotional trauma of the process, we can assist with planning for the division of assets in a tax-effective manner to help ease the tax “pain”.http://www.mnp.ca/en/media-centre/blog/2011/10/25/were-getting-a-divorce-how-to-ease-some-of-the-tax-burden/Tue, 25 Oct 2011 00:00:00 GMTAs complex as the Income Tax Act is, especially in the area of dealing with estates and trusts and the threat of income tax, the executor and/or trustee in most instances will hire an advisor to help them through the myriad of rules and regulations and to minimize their risk.http://www.mnp.ca/en/media-centre/blog/2011/11/3/finding-the-right-executor/Thu, 03 Nov 2011 00:00:00 GMTThere has been a recent flurry of articles, blogs and even televised reports in the U.S. concerning a U.S. Senate bill introduced by Sens. Chuck Schumer (D-NY) and Mike Lee (R-Utah). The bill proposes a number of changes to the immigration rules, most of which are intended to streamline and modernize procedures for obtaining visitor visas.http://www.mnp.ca/en/media-centre/blog/2011/11/9/us-bill-for-snowbirds-tempest-in-a-teapot/Wed, 09 Nov 2011 00:00:00 GMTDue to proposed changes by the Federal Government, the rules regarding a corporation carrying on a PSB (personal service business) just became a lot more expensive, tax-wise.http://www.mnp.ca/en/media-centre/blog/2011/11/23/income-tax-on-a-psb-a-halloween-trick-from-the-federal-government/Wed, 23 Nov 2011 00:00:00 GMTMany individuals now resident in Canada have been shocked to learn that even though they may not owe any US tax, the IRS can go back many years and assess massive penalties for failing to report information about their income or assets.http://www.mnp.ca/en/media-centre/blog/2011/11/29/say-uncle-sam-yet-another-tax-filing-requirement-that-will-affect-americans-living-in-canada/Tue, 29 Nov 2011 00:00:00 GMTWhen it comes to owner-managed corporations, the salary vs. dividends compensation conundrum is one of the most frequently discussed topics between clients and their accountants. There are clear advantages and disadvantages to both, but choosing which is right for you will depend on a number of personal factors and preferences.http://www.mnp.ca/en/media-centre/blog/2011/12/9/salary-vs-dividends-which-is-right-for-you/Fri, 09 Dec 2011 00:00:00 GMTThe IRS keeps coming up with new “incentives” for Americans in Canada who haven’t filed US returns, but want to come clean and file. The US Ambassador to Canada said more relief would be on its way and the IRS followed through promptly. However, the release that was recently issued now raises more questions than it answers.http://www.mnp.ca/en/media-centre/blog/2011/12/9/irs-relief-for-americans-in-canada-isnt-what-we-hoped-for-or-what-we-were-promised/Fri, 09 Dec 2011 00:00:00 GMTAfter several weeks speculating about the implications of the IRS’ new “incentives” for Americans in Canada filing belated tax returns. The IRS has now confirmed that the Fact Sheet was the guidance the Ambassador had alluded to when he promised further relief.http://www.mnp.ca/en/media-centre/blog/2011/12/23/specifics-of-the-ovdi-only-raise-more-concerns/Fri, 23 Dec 2011 00:00:00 GMTIf you work overseas for a Canadian company for a period of at least six months, you may be eligible for the Overseas Employment Tax Credit (OETC). This credit provides a significant reduction in federal tax payable for qualifying individuals on your personal income tax return.http://www.mnp.ca/en/media-centre/blog/2012/1/3/what-is-the-overseas-employment-tax-credit/Tue, 03 Jan 2012 00:00:00 GMTIn previous posts, I have reported on the recent flip-flopping of the IRS on the issue of Americans living abroad who haven’t filed US tax returns, but want to come clean.http://www.mnp.ca/en/media-centre/blog/2012/1/9/us-citizens-living-in-canada-have-yet-another-opportunity-to-come-clean-with-the-irs/Mon, 09 Jan 2012 00:00:00 GMTUS law requires that a US citizen show a passport in order to gain entry to the United States. However, it has been very common for US citizens living in Canada to use their Canadian passports when they’ve crossed the border going into the United States. Many don't even have US passports.http://www.mnp.ca/en/media-centre/blog/2012/1/31/passports-the-irs-continues-to-tighten-the-screws/Tue, 31 Jan 2012 00:00:00 GMTDo you hold a partnership interest on behalf of someone else? Last chance to file partnership returns.http://www.mnp.ca/en/media-centre/blog/2012/3/28/nominee-partnership-returns-for-2011/Wed, 28 Mar 2012 00:00:00 GMT