Tax Issues

Total 356 Posts

Professional fees incurred in the context of a litigation with CRA

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On occasion, the personal representative of an estate may have to incur costs to either settle or disclose a matter with the Canada Revenue Agency (CRA). In a translated technical interpretation, the CRA provided some of its own guidance on how to navigate the relevant rule in the Income Tax Act (ITA). The ITA generally permits a deduction in computing a taxpayer’s income for a taxation year for amounts paid….

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Canada Revenue Agency, Costs, Estate Administration, Executors, Tax Issues, Trustee

Taxable preferred shares and estates – say what?

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The tax reform of 1987 introduced the term “taxable preferred shares”[1] to curtail the tax advantage for non-taxpaying corporations using preferred share financing over debt financing. The result of this reform subjected the non-taxpaying corporation to a (current) 25 per cent tax on dividends that were paid on taxable preferred shares in excess of a specified dividend allowance.  This tax imposed under the Income Tax Act is referred to as….

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Estate Planning, Tax Issues, Trusts

TFSA’s and Non Resident Penalties – An Update

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A couple years ago, one of my blog colleagues wrote on the residency rules regarding tax free saving accounts (TFSA’s). Generally, as an owner of TFSA, if you leave Canada, the accumulated funds may remain in the TFSA without Canadian tax consequences. You can’t make any further contributions but you can make withdrawals. The penalties for not abiding by the non-residency contribution rules are severe – essentially 1% per month….

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Canada Revenue Agency, International, Investments, Liability, Tax Issues, Uncategorized

Valuing Estate Assets – A Hierarchy of Evidence

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Acting as an estate trustee can be a difficult job. It is often made more difficult when you have to work with a sibling. While the types of disputes co-estate trustees can have with one another are seemingly infinite, one common fight is over valuing an estate asset. Valuing estate assets properly is important – it may impact estate tax, the deceased’s personal taxes, and the sale price of the….

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Canada Revenue Agency, Estate Administration, Estate Administration and Probate Applications, Estate Litigation, Executors, Family Conflict, Probate Tax, Property, Real Estate, Tax Issues, Trustee, Trustee Disputes

Use of Cottage By Children of Settlor of an Alter Ego/Joint Partner Trust

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Both alter ego and joint partner trusts (the trust) allow a settlor to transfer capital assets into the trust on a tax-deferred basis if the following conditions are met: The trust is created after 1999. The settlor is at least 65 at the time of creation. In the case of an alter ego trust, the settlor must be entitled to receive all the trust’s income that arises before death. In….

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Canada Revenue Agency, Cottage, Estate Administration and Probate Applications, Estate Planning, Executors, Property, Real Estate, Succession Planning, Tax Issues, Trustee

FAMILY TRUSTS AND DISTRIBUTIONS OF CAPITAL GAINS

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Capital gain splitting on the sale of business interests, owned by family trusts with several beneficiaries, continues to be a valuable tool for tax planning purposes, including the opportunity under certain circumstances to access the super capital gains exemption more than once in such a transaction. However, the beneficiaries of a trust who are designated an allocation of proceeds from a share sale and stand to benefit from applying the….

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Canada Revenue Agency, Small Business, Succession Planning, Tax Issues, Trusts, Uncategorized
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