Tax Issues

Total 356 Posts

Disability Tax Credit

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The 2021 Federal Budget included proposals that would see an expansion of the Disability Tax Credit to more Canadians. The Disability Tax Credit (DTC), with a value of $1,299 for 2021, is a non-refundable credit intended to offset the impact of disability-related costs. In order to claim this credit, a taxpayer must have a certificate confirming they have a severe and prolonged impairment in physical or mental function, or be….

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Canada Revenue Agency, Capacity Law, Caregiving, Disability, Elder Care, Estate Administration, Estate Planning, Executors, Tax Issues

Bill C-208 the race to the finish line

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Bill C-208 (Bill), “an Act to amend the Income Tax Act (transfer of small business or family farm or fishing corporation)” is a private member’s bill introduced by Conservative MP, Larry Maguire[1] on February 19, 2020.  The purpose of this Bill is to allow share capital restructurings and inter-generational transfers within a family unit, which are sometimes caught by two prominent anti-avoidance provisions in the Income Tax Act (ITA), Sections 55….

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Business Succession Planning, Tax Issues

Inheritance and Tax

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There is renewed discussion on whether Canada will become another jurisdiction where specific gift or estate taxes will be imposed on inheritances. There is speculation that the discussion will lead to something concrete as early as next week’s Federal Budget. In the meantime, there are situations where inheritances can come with a tax burden, such as the one described in a recent Tax Court of Canada case (Goldman v. the….

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Attorney Compensation, Canada Revenue Agency, Compensation, Costs, Courts, Estate Administration, Estate Administration and Probate Applications, Estate Litigation, Executors, Investments, Liability, Tax Issues, Trustee, Trustee Compensation, Trusts, Uncategorized

Tax returns for deceased persons

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The Canada Revenue Agency (CRA) will occasionally post requests to help improve the Agency’s processing efficiency. Recent posts caught my attention given their application to returns for deceased individuals. Date of Death The CRA noticed that tax preparers occasionally include a deceased person’s date of death on the living spouse’s tax return. This may result in the CRA mistakenly recording the living spouse as deceased. This error can cause major….

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Canada Revenue Agency, Executors, Tax Issues, Uncategorized

Death, taxes and cryptocurrency

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Everyone knows that you can’t avoid the tax collector, and death is no exception.  Under the Canadian Income Tax Act, on the death of an individual subsection 70(5) will trigger a deemed disposition of all the deceased taxpayer’s capital property at fair market value thus taxing any accrued capital gains in the deceased’s final tax return.  There is an exception to this deemed disposition rule which will defer the taxation….

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Estate Planning, Executors, Tax Issues

Death Benefit Payments

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The Canada Revenue Agency (CRA) recently released a translated technical interpretation with helpful guidance on the tax treatment of a death benefit payment in certain specific situations. A death benefit is income of either the estate or the beneficiary who receives it. Up to $10,000 of the total of all death benefits paid (other than CPP or QPP death benefits) is not taxable. The CRA had the following to say….

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Canada Revenue Agency, Estate Planning, Executors, Small Business, Tax Issues
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