http://www.mnp.ca/media-centre/blog/tags/taxTax Blog Post RSS FeedCopyright 2012MNP All rights reserved.The Commissioner of the Internal Revenue Service (IRS), Douglas Shulman recently stated his beliefs on the state of the economy and tax compliance. http://www.mnp.ca/en/media-centre/blog/2009/4/27/fallout-or-consequences-the-irs-makes-its-case-for-increased-enforcement/Mon, 27 Apr 2009 00:00:00 GMTA recession can bring out the best and worst in everyone. The U.S. State governments are no exception. In the face of declining revenues, states frequently begin to more aggressively pursue opportunities to collect additional revenues.http://www.mnp.ca/en/media-centre/blog/2009/5/7/state-collection-efforts-is-a-soft-approach-preferred/Thu, 07 May 2009 00:00:00 GMTWhat 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 GMTThe 2009 Federal Budget increased the Small Business Deduction to $500,000 from $400,000, and many provinces have also raised their small business deduction limit to $500,000. http://www.mnp.ca/en/media-centre/blog/2009/6/11/the-small-business-deduction/Thu, 11 Jun 2009 00:00:00 GMTA recent decision rendered by the Federal Court of Appeal (the “Court”) may impact the GST required to be collected, and that has been paid, on investment management fees.http://www.mnp.ca/en/media-centre/blog/2009/7/13/paying-gst-on-investment-management-fees/Mon, 13 Jul 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 GMTAre you an employer who pays benefits to your employees? Do you know how to account for the GST on those benefits? http://www.mnp.ca/en/media-centre/blog/2009/8/10/gst-and-employee-benefits-allowances-and-reimbursements/Mon, 10 Aug 2009 00:00:00 GMTHave you started your own business and are not sure about whether you should register for GST? You are able to voluntarily register for GST if you are carrying on a commercial activity. Either selling taxable goods or providing taxable services. http://www.mnp.ca/en/media-centre/blog/2009/8/31/when-to-register-for-gst/Mon, 31 Aug 2009 00:00:00 GMTA summary of the B.C. budget update released September 1, 2009.http://www.mnp.ca/en/media-centre/blog/2009/9/8/bc-budget-update-september-1-2009/Tue, 08 Sep 2009 00:00:00 GMTDo you live in one of the PST provinces (B.C., Saskatchewan, Manitoba, Ontario, Quebec or PEI), do you need to register for PST?http://www.mnp.ca/en/media-centre/blog/2009/9/15/when-to-register-for-pst/Tue, 15 Sep 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 GMTOn October 26, 2009, the Alberta Government announced the Professional Corporations Amendment Act 2009 which focuses on removing the restrictions of share ownership within professional corporations.http://www.mnp.ca/en/media-centre/blog/2009/10/27/new-tax-legislation-for-alberta-professionals/Tue, 27 Oct 2009 00:00:00 GMTBy this time most farmers will have their 2009 harvest in the bin. So, the next task is to consider looking at your accounting records to plan for the current year’s tax liability. The following is a list of items farmers should pay close attention to prior to December 31, 2009.http://www.mnp.ca/en/media-centre/blog/2009/11/25/top-9-year-end-tax-planning-tips-for-farmers/Wed, 25 Nov 2009 00:00:00 GMTBill 53, also known as the Professional Corporations Statutes Amendment Act, 2009 passed through the Alberta legislature and was given Royal Assent on November 26, 2009. http://www.mnp.ca/en/media-centre/blog/2009/12/7/new-tax-legislation-for-alberta-professionals-becomes-law/Mon, 07 Dec 2009 00:00:00 GMTIn today’s economy, investing in U.S. real estate is an exciting opportunity for Canadians. The U.S. taxation of Canadians holding U.S. real estate is complicated and should be evaluated fully before making the investment. Here are some issues to consider: http://www.mnp.ca/en/media-centre/blog/2009/12/9/investing-in-us-real-estate-have-you-thought-about-us-tax/Wed, 09 Dec 2009 00:00:00 GMTImagine the following fact pattern: A small startup software company - keen to monetize the company’s unique software offering - goes South to generate sales. Unfortunately for the company, the recession hits.http://www.mnp.ca/en/media-centre/blog/2010/1/4/where-the-buffalo-roam-and-tax-collectors-play-aka-a-cfos-sales-tax-nightmare/Mon, 04 Jan 2010 00:00:00 GMTAsking yourself these questions could save you a lot of money. The Scientific Research and Experimental Development (SR&ED) tax credit is a valuable incentive which can provide a refundable tax credit for Canadian businesses. For example, a private company that spends $100,000 on SR&ED can earn a net after tax savings of approximately $47,000.http://www.mnp.ca/en/media-centre/blog/2010/1/27/taking-advantage-of-the-scientific-research-and-experimental-development-sred-tax-credit/Wed, 27 Jan 2010 00:00:00 GMTIt’s official! The new generally accepted accounting principles for private enterprises (PE GAAP) have been released. The date you need to mark in your calendar is January 1, 2011, when your private enterprise must choose to adopt either the new PE GAAP or International Financial Reporting Standards (IFRS).http://www.mnp.ca/en/media-centre/blog/2010/2/16/pe-gaap-vs-ifrs-the-choice-is-yours/Tue, 16 Feb 2010 00:00:00 GMTThe first step in taking advantage of the Canada Revenue Agency’s (CRA’s) SR&ED tax credit incentives is to determine if you are performing qualified SR&ED work. Once you’ve established that, the next step is to produce documentation and evidence to support that eligible work was done and that eligible expenses were incurred.http://www.mnp.ca/en/media-centre/blog/2010/3/1/documenting-your-scientific-research-experimental-development-sred-claim/Mon, 01 Mar 2010 00:00:00 GMTFederal Minister of Finance James M. Flaherty delivered the Conservative government’s Federal budget on March 4, 2010. Budget 2010 continues to build on last year’s Economic Action Plan with a focus on creating jobs and growth, sustaining the nation’s economic advantages and planning to return to a balanced budget. http://www.mnp.ca/en/media-centre/blog/2010/3/4/federal-budget-announcement-2010/Thu, 04 Mar 2010 00:00:00 GMTInformation on an extremely important component of the upcoming HST in BC and Ontario was recently released - The Place of Supply Rules. If you're asking "What rate do I charge?", the rules have changed!http://www.mnp.ca/en/media-centre/blog/2010/3/15/hst-the-place-of-supply-rules/Mon, 15 Mar 2010 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 GMTFinance Minister Rosann Wowchuk presented Manitoba’s 2010 Provincial Budget on March 23, 2010.http://www.mnp.ca/en/media-centre/blog/2010/3/23/manitoba-budget-announcement-2010/Tue, 23 Mar 2010 00:00:00 GMTFinance Minister Rod Gantefoer delivered Saskatchewan’s 2010 budget on March 24, 2010.http://www.mnp.ca/en/media-centre/blog/2010/3/24/saskatchewan-budget-announcement-2010/Wed, 24 Mar 2010 00:00:00 GMTFinance Minister Duncan presented a stand pat Ontario Budget March 25, 2010.http://www.mnp.ca/en/media-centre/blog/2010/3/25/ontario-budget-announcement-2010/Thu, 25 Mar 2010 00:00:00 GMTJuly 1 will be a very important day for Canadian businesses in 2010, as it is the first day of the Harmonized Sales Tax in B.C. and Ontario. Although the new taxation scheme will have a great impact on business owners in those two provinces, it also has repercussions for companies in other provinces, and the time to plan for them is running out.http://www.mnp.ca/en/media-centre/blog/2010/4/8/harmonized-sales-tax-hst-question-answer/Thu, 08 Apr 2010 00:00:00 GMTIn an effort to reduce Nova Scotia’s deficit to a sustainable level, the province’s NDP Government will increase the harmonized sales tax (HST), effective July 1, 2010. http://www.mnp.ca/en/media-centre/blog/2010/4/21/canada-expected-to-see-five-new-hst-rates-by-july-1-2010/Wed, 21 Apr 2010 00:00:00 GMTThe first step in taking advantage of the Canada Revenue Agency’s (CRA’s) SR&ED tax credit incentives is to determine if you are performing qualified SR&ED work. But how do you know if you're doing qualified work? The first thing to figure out is whether or not you have performed a technological advancement. http://www.mnp.ca/en/media-centre/blog/2010/4/27/just-what-exactly-is-a-technological-advancement-in-the-sred-program/Tue, 27 Apr 2010 00:00:00 GMTFrom our last post we know that the first thing to figure out is whether or not you have performed a technological advancement. One of the key factors into determining whether or not an advance happened are what obstacles did you have to overcome, or rather what uncertainties did you have when attempting to achieve your technological advancement? http://www.mnp.ca/en/media-centre/blog/2010/6/9/just-what-exactly-is-a-technological-obstacle-in-the-sred-program/Wed, 09 Jun 2010 00:00:00 GMTUnlike a corporation, a trust is not a legal entity, but is a legal relationship. The trust relationship is created by intention. The intention to create a trust is usually evidenced by a document signed by the settlor and the trustees which outlines the obligations and powers of the trustees, as well as the interests of the beneficiaries.http://www.mnp.ca/en/media-centre/blog/2010/6/16/use-and-taxation-of-discretionary-family-trusts/Wed, 16 Jun 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 GMTWhile Canada has an excellent system of food safety, recent crises and product recalls have given food safety a high public profile -- raising the question of whether government and the food industry are investing sufficient financial and human resources to adequately address complex risks.http://www.mnp.ca/en/media-centre/blog/2010/8/25/its-time-to-consider-a-food-safety-tax-credit/Wed, 25 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 GMTThe Canada Revenue Agency currently has a tax credit program in place that may allow a Credit Union to receive a refund for a portion of expenditures made to address off-the-shelf system deficiencies, extensions to the application that are required to meet Credit Union business practices, or architecturally based shortcomings.http://www.mnp.ca/en/media-centre/blog/2010/11/17/how-credit-unions-can-use-innovation-as-a-tax-advantage/Wed, 17 Nov 2010 00:00:00 GMTLet’s set the scene – you're an entrepreneur; you have a spouse who isn’t working and you are about to have your first child. You currently have no staff, but your business is expanding rapidly and you need to hire some employees and they're going to want medical and dental coverage. What plan is right for your business' taxation needs?http://www.mnp.ca/en/media-centre/blog/2010/12/7/is-a-private-health-services-plan-right-for-your-business-taxation-needs/Tue, 07 Dec 2010 00:00:00 GMTIndividual Pension Plans (IPPs) are an excellent vehicle for business owners to save for retirement on a tax effective basis. We're going to focus on one particular benefit of IPPs, referred to as terminal funding. This is a large contribution opportunity which arises when the business owner retires.http://www.mnp.ca/en/media-centre/blog/2010/12/28/ipp-terminal-funding/Tue, 28 Dec 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 GMTIf you are considered as a Selected Listed Financial Institution, you will be required to file a form known as the Special Attribution Method for your upcoming fiscal year end. This form is required to be filed once per year within three months of your fiscal year end, commencing for all fiscal year-ends after July 1, 2010.http://www.mnp.ca/en/media-centre/blog/2011/2/9/will-hst-legislation-changes-impact-my-credit-union/Wed, 09 Feb 2011 00:00:00 GMTThe IRS has been trying for years to get Americans with money offshore to disclose these accounts and report the income. On February 8, the IRS announced a new voluntary disclosure initiative to get non-compliant persons – U.S. citizens, residents, and green-card holders – into the system and compliant.http://www.mnp.ca/en/media-centre/blog/2011/2/11/us-2011-offshore-voluntary-disclosure-initiative/Fri, 11 Feb 2011 00:00:00 GMTThe Canadian Income Tax Act (“the Act”) allows vendors of shares of a qualifying small business corporation to claim a deduction from taxable income. This deduction, commonly referred to as the Lifetime Capital Gains Exemption (“LCGE”) is more difficult to access than one might expect.http://www.mnp.ca/en/media-centre/blog/2011/2/15/so-you-want-to-claim-your-capital-gains-exemption/Tue, 15 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 GMTIf you own a Canadian business, you have probably heard something about the capital gain deduction (or capital gain exemption). In my practice, clients are often surprised to learn it is not available to all businesses in all situations.http://www.mnp.ca/en/media-centre/blog/2011/2/17/using-your-capital-gain-deduction/Thu, 17 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 GMTOn Thursday, February 24, 2011, the Alberta Minister of Finance and Enterprise, Lloyd Snelgrove, presented the Province’s 2011 Budget.http://www.mnp.ca/en/media-centre/blog/2011/2/24/alberta-budget-announcement-2011/Thu, 24 Feb 2011 00:00:00 GMTThe year 2010 contained significant GST/HST developments that affected the financial services sector. Complex legislation dealing with imported taxable supplies and input tax credits (ITCs) were put into force. It also provides detailed rules for classifying and allocating expenses and purchases for input tax credit purposes.http://www.mnp.ca/en/media-centre/blog/2011/3/3/gsthst-developments-in-the-financial-sector/Thu, 03 Mar 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 GMTThere are few “black and white” answers when it comes to Canadian tax law. Most situations require a careful evaluation of the facts combined with knowledge of the Income Tax Act, related resources and case law. The question of whether the activity of making wine constitutes farming is a great example.http://www.mnp.ca/en/media-centre/blog/2011/3/9/the-cras-view-on-the-activity-of-making-wine/Wed, 09 Mar 2011 00:00:00 GMTThe Place of Supply rules are necessary to determine the appropriate rate of tax to charge. Under the GST/HST system if you are registered for these taxes, it is the requirement of the person selling the good or supplying the service to charge the correct rate of tax.http://www.mnp.ca/en/media-centre/blog/2011/3/10/a-case-study-on-hst-part-i-place-of-supply-rules/Thu, 10 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 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 GMTContinuing our discussion of Game Company located in Red Deer, Alberta- the question we will answer is with regards to the tax rate applied to the purchase of supplies.http://www.mnp.ca/en/media-centre/blog/2011/3/22/a-case-study-on-hst-part-ii-gsthst-rates-on-supplies/Tue, 22 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 GMTFor tax purposes, a partnership is not considered a taxpayer, but rather an entity that calculates and allocates its taxable income to its partners. The partners then include this allocation in their taxable income in the year containing the fiscal year end of the partnership.http://www.mnp.ca/en/media-centre/blog/2011/3/25/federal-budget-brings-changes-to-corporate-partnerships/Fri, 25 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 GMTRunning a winery is demanding and understanding the business of wine can be a full-time job. But to be successful, you need to tend to your business plan and tax situation as much as your winery. Knowing what tax-incentive programs are out there allows you to make informed business decisions and grow your operation.http://www.mnp.ca/en/media-centre/blog/2011/3/30/harvest-the-benefits-of-tax-incentive-programs-for-your-winery/Wed, 30 Mar 2011 00:00:00 GMTContinuing on with our case study of Game Company, we will look at further instances of how the Place of Supply Rules regarding Tangible Property come to bear on their day-to-day operation.http://www.mnp.ca/en/media-centre/blog/2011/4/1/a-case-study-on-hst-part-iii-tangible-personal-property/Fri, 01 Apr 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 GMTMr. Flaherty re-introduced the 2011 Federal Budget on Monday, June 6, 2011, restating all of the same measures previously announced in March.http://www.mnp.ca/en/media-centre/blog/2011/6/7/re-introducing-the-2011-federal-budget/Tue, 07 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 GMTMany companies in a loss position are often not concerned about filing their corporate income tax returns on time thinking that there will be no late-filing penalties. Advisors also often tell clients not to worry about filing late when in a loss position. http://www.mnp.ca/en/media-centre/blog/2011/6/27/no-penalties-for-late-filing-think-again/Mon, 27 Jun 2011 00:00:00 GMTLucky you, there is gravel in your farm land worth a lot of money! Lots of money usually means income tax. What are the income tax consequences? http://www.mnp.ca/en/media-centre/blog/2011/7/4/gravel-extraction/Mon, 04 Jul 2011 00:00:00 GMTSuccessful businesses that operate in a corporate structure can find situations where excess cash/investments can create adverse tax consequences because the shares of a company may not qualify for the capital gains exemption either on the sale of the shares by the individual or on the death of the shareholder.http://www.mnp.ca/en/media-centre/blog/2011/7/12/the-purification-of-a-corporation/Tue, 12 Jul 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 GMTAnyone who has bought a property with a spouse or another individual has probably heard the terms “joint tenancy” and “tenants-in-common”. But what is the difference between these two terms? And, more importantly, when placed in the context of estate planning, why do we care?http://www.mnp.ca/en/media-centre/blog/2011/9/20/estate-planning-joint-tenancy-vs-tenants-in-common-beware/Tue, 20 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 GMTThe majority of families in Canada look forward to a vacation as a time to get away from the everyday routine of work and school and to relax and spend time with the family. In today’s economy, a business that could offer some potential savings to make a family’s vacation more affordable will be seen as being an attractive option.http://www.mnp.ca/en/media-centre/blog/2011/10/14/have-the-government-help-pay-for-your-vacation/Fri, 14 Oct 2011 00:00:00 GMTMany Canadians are surprised to learn that their estates may be subject to the U.S. estate tax to the extent that they hold certain property situated or deemed to be situated within the United States. The most common examples of such property are U.S. real estate and securities issued by U.S. corporations.http://www.mnp.ca/en/media-centre/blog/2011/10/18/canadians-owning-us-real-estate-and-the-us-estate-tax/Tue, 18 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 GMTOn October 17, 2011, the Jenkins Commission released the long-awaited findings of its review of federal support for R&D in Canada in the report Innovation Canada: A Call to Action.http://www.mnp.ca/en/media-centre/blog/2011/10/27/sred-changes-what-do-they-mean-for-you/Thu, 27 Oct 2011 00:00:00 GMTA recent US Tax Court decision (Fuhrman, TC Memo 2011-236) – in determining the appropriateness of a mere $100,000 management fee charged to a US taxpayer – held that to prove that a management fee is appropriate, certain conditions must be met. The taxpayer was unsuccessful largely because there was little or no documentation retained.http://www.mnp.ca/en/media-centre/blog/2011/10/28/taking-your-cross-border-management-fees-seriously/Fri, 28 Oct 2011 00:00:00 GMTThe HST was voted out in B.C. Businesses in the province must transition back to collecting and paying PST and GST—a process that will have its own complexities that need to be carefully managed. The good news is that the transition may also benefit you.http://www.mnp.ca/en/media-centre/blog/2011/11/1/hst-in-bc-helping-you-manage-the-transition-back-to-pst/Tue, 01 Nov 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 GMTBarrie McKenna of the Globe & Mail interviewed the US Ambassador to Canada and myself on December 1, 2011. It appears that the noise made by Canadian practitioners of US tax, as well as Jim Flaherty, our Minister of Finance, has had some effect. The IRS is realizing that it is better to focus its efforts on Americans elsewhere.http://www.mnp.ca/en/media-centre/blog/2011/12/2/tentative-plans-from-the-irs-to-ease-the-burden-on-american-residents-in-canada/Fri, 02 Dec 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 GMTOn March 2 at the 36th annual Tax Law Conference, there was some promising news from the IRS Chief Council.http://www.mnp.ca/en/media-centre/blog/2012/3/5/us-citizens-in-canada-status-of-penalty-forgiveness/Mon, 05 Mar 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 GMTMost businesses know (or soon find out) when they bring their own property into a PST province on a temporary use basis to carry out a contract they will owe a pro-rata amount of PST.http://www.mnp.ca/en/media-centre/blog/2012/5/17/saskatchewan-pst-a-new-twist-on-temporary-use/Thu, 17 May 2012 00:00:00 GMT