Tax Issues

Total 356 Posts

Reversionary trusts – an interesting technicality

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Co-author: Rock Lapalme, CPA, CA, TEP (Associate Director of Tax – Baker Tilly Canada) Most practitioners are aware that subsection 75(2) of the Income Tax Act (ITA) may apply to a trust and will attribute all income or loss from a trust’s property back to the person (transferor) from whom the property (or substituted property) was directly or indirectly received if the property may revert to the transferor[i]. In addition….

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Tax Issues, Trusts

Beneficial ownership reporting for trusts – the uncertainty is almost here!

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The beneficial ownership reporting for trusts (BORT) rules, originally announced in the 2018 Federal Budget on February 27, 2018, has made its way into the House of Commons. The original draft legislation released by Department of Finance on July 27, 2018 was updated on February 4th and on August 9th of 2022. This final update of the BORT draft legislation is now included in the 172 pages of Bill C-32[1]….

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Canada Revenue Agency, Estate Administration, Tax Issues, Trusts

New Trust Reporting Requirements Postponed Yet Again!

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Today’s blog was written by Pritika Deepak, Associate at Fasken LLP. Several tax practitioners and professionals alike breathed a sigh of relief on November 3rd, 2022, when Parliament confirmed that the enhanced tax reporting obligations for trusts shall be postponed once more. As per draft legislation published on August 9, 2022, the application of such enhanced rules was expected to apply to taxation years ending after December 30, 2022. Fortunately,….

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Canada Revenue Agency, Tax Issues, Trusts, Uncategorized

Principal residence – deceased vs. estate (Part 2): Time is of the essence

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In my previous blog, Principal residence – deceased vs. estate, I discussed the opportunity for an estate to claim a capital loss on a property that was previously the principal residence of the deceased and carry it back to the deceased’s final tax return under subsection 164(6) of the Income Tax Act (ITA). A number of readers reached out to me regarding the difficulties of realizing the loss and filing….

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Estate Administration, Real Estate, Tax Issues

Principal residence – deceased vs. estate

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The over-heating of the housing market that started in 2021 is starting to slowly cool off as a result of rising interest rates. This cooling of the over-heated housing market has given rise to a potential scenario that was originally addressed by the Canada Revenue Agency (CRA) in a technical interpretation issued in January of 2009[1]. The potential scenario exists when a decedent is deemed to have disposed of their….

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Estate Administration, Real Estate, Tax Issues

A family trust and its beneficiaries – think twice before including your niece or nephew

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Discretionary family trusts used to be a staple in most private company corporate structures. The income splitting benefits were obvious, and professionals were more than happy to implement a family trust in almost any corporate structure. The popularity of using family trusts eventually led to complacency from some professionals in understanding the detailed tax rules that applied to implementing those trusts. In the earlier years of drafting trust documents, professionals….

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Canada Revenue Agency, Tax Issues, Trusts
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