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Reporting the Sale of Your Principal Residence
Before 2016, there was no need to report the sale of your principal residence on your personal tax return. Starting with the 2016 tax year, you are required to report the sale of your principal residence on Schedule 3 and Form T2091 in certain cases, on your personal...
Changes to the Taxation of Passive Investment Income of CCPC’s
The use of the corporate tax deferral to hold passive investments inside a corporation. Currently in Alberta, Canadian-controlled private corporation (CCPC) earns less than $500,000 pays tax rate at 12.0%, which is at a lower rate than personal income. This results...
Tax Implications to Incorporate a Sole Proprietorship
Once a sole proprietor decides to incorporate a sole proprietorship. There are tax implications for the conversion from a sole proprietor to a corporation. A transfer of assets from a sole proprietor to a corporation would be deemed disposition of assets at...
Unreported Income Penalty
Repeated Failure to Report Income Penalty Under subsection 163(1) of the Income Tax Act (ITA), a taxpayer is liable for a penalty in respect of fail to report at least $500 of income (slips) in the year and in any of the three preceding taxation years. The federal and...
Limit Access to the Small Business Deduction
The small business deduction (SBD) is a tax rate reduction available to Canadian-Controlled Private Corporations (CCPCs) that earn on the first $500,000 of active business income in Canada. The combined Federal and Alberta for small business rate for 2017 is...
Change in Tax Treatment of Work in Progress for Professionals
Generally, taxpayers are required to include the value of work in progress (WIP) in computing their income for tax purposes. However, certain professionals (Accountants, lawyers, dentists, medical doctors, veterinarians, and chiropractors) may elect under...
Changes to the Voluntary Disclosure Program
The Voluntary Disclosure Program (VDP) allows taxpayers with an opportunity to come forward and correct inaccurate or incomplete previously filed returns or to file returns that have not been filed. The VDP provides relief of penalties, however, taxpayers still have...
Changes to Taxation of Private Corporations and their Shareholders
On July 18, 2017, the Department of Finance proposed changes to the following three areas of tax planning using private corporations: Income sprinkling (Splitting) with family members Holding passive investments inside a private corporation Converting income into...