Tax Issues

Total 356 Posts

Charitable remainder trusts: what are they and when are they useful?

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A charitable remainder trust (CRT), although not widely used in Canada, can be a useful charitable giving tool that generates an immediate tax credit for the donor. In an inter vivos context, an individual establishes an alter ego trust and transfers property to the trust on a tax-deferred basis. The trust holds the property for the benefit of the individual during the individual’s lifetime, entitling the individual to the trust’s income but….

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Canada Revenue Agency, Charitable Giving, Estate Donations, Estate Planning, Tax Issues, Wills

Tax planning in uncertain times

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Tax planning can be very complicated with an Income Tax Act (“Act”) consisting of over 1.1 million words. This is a far cry from the original 4,000 words of the Act’s predecessor, Income War Tax Act[1], which was originally enacted as a temporary measure in 1917. The more than 3,000 pages contained in the Act is the legislation that governs our Canadian income tax system that is supplemented by precedent….

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Canada Revenue Agency, Estate Planning, Practice Management, Tax Issues

AMENDING TAX ELECTIONS AFTER THE FACT

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The rollover provisions of the Income Tax Act, under subsection 85, permit a taxpayer to elect to transfer “eligible property” to a taxable Canadian corporation in exchange for consideration that includes at least one share of the corporation. “Eligible property” includes most capital property, Canadian or foreign resource property, eligible capital property and inventory, other than inventory that is real property. Where the taxpayer and the corporation agree upon an….

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Canada Revenue Agency, Estate Planning, Investments, Small Business, Tax Issues, Trusts, Uncategorized

Bill C-208: The saga continues…

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On June 29, 2021, the Private Member’s Bill C-208, regarding the transfer of small businesses and family farm or fishing corporations (the Bill), received Royal Assent. The Bill limits the application of section 84.1 on inter-generational business sales. Avoiding section 84.1 allows the vendor to receive capital gains treatment on a non-arm’s length disposition of shares and potentially use the lifetime capital gains exemption (LCGE) to shelter any gain from tax. On….

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Canada Revenue Agency, Tax Issues

The medical expense tax credit: COVID-19 tests and vaccines

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With the requirements for COVID-19 tests for entry into Canada and vaccines, the Canada Revenue Agency (CRA) was asked to comment on the availability of the medical expense tax credit (METC). Medical expenses which are eligible for the METC are limited to those described in our tax rules. If a particular expenditure is not described as an eligible medical expense, or if the conditions under which the expenditure would qualify….

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Canada Revenue Agency, Costs, Elder Care, Executors, Geriatric Care Management, Healthcare, Tax Issues, United States

The Finance Strikes Back

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As the story of Bill C-208 (intergenerational transfers) continues to evolve, I can’t help but make analogies to my favorite childhood trilogy.  The Star Wars trilogy was a dominating force in my childhood.  I lived and breathed the interesting stories produced by this vast universe created by George Lucas. In comparison to Star Wars, our vast tax universe also produces interesting stories. The latest story involves the private member’s bill,….

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Business Succession Planning, Tax Issues
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