Tax Issues

Total 356 Posts

Significant Tax Re-Assessment Due to An Estate Valuation Gone Wrong

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I have been writing about valuations for estate plan agreements, highlighting that they should be based on fair and reasonable methods, prepared in good faith, properly supported and documented at the time of valuation. In Lewin v. the Queen 2019 TCC 21, The Lewin Estate was appealing a significant tax reassessment of the deceased’s terminal return issued some five years after the original assessment. The issue to be decided is….

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Canada Revenue Agency, Estate Administration, Estate Litigation, Executors, Investments, Tax Issues, Trustee, Uncategorized

SPOUSAL TRUSTS : COUPLE OF UPDATES

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Life insurance policy – rollover at cost? In a recent technical interpretation, the Canada Revenue Agency (“CRA”) confirmed that where a spousal trust is required to pay the life insurance premiums on a policy it owns and is the beneficiary of the policy, a rollover at cost pursuant to the relevant section of the Income tax Act (“ITA”) is not available on the original transfer of assets to the trust…..

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Canada Revenue Agency, Estate Administration, Insurance, Interest, Investments, Spouse, Tax Issues, Trustee, Trusts, Uncategorized

Pipelines and non-resident beneficiaries

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Without proper tax planning, private company shareholders face the prospect of a double tax on the value of shares – once at the time of death and again when the successor beneficiaries extract the share value from the company.  Post mortem “pipeline” planning solves this problem by allowing the estate to extract the share value without additional tax paid in the deceased shareholder’s final return, that is, before a recently….

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Canada Revenue Agency, Estate Administration, Estate Planning, Executors, Tax Issues

Disability Tax credits and Bankruptcy

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In general, unpaid and to be paid disability tax credits can form part of a bankrupt’s estate in the form of property and income. If they are “property of the bankrupt” within the Bankruptcy and Insolvency Act, (the “BIA”), then they are 100% distributable amongst estate creditors in accordance with the priority scheme set out in the BIA. If they are “income” within the BIA, they are subject to contribution….

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Canada Revenue Agency, Disability, Estate Administration, Tax Issues, Uncategorized

Fraudulent investment—recourse options

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In an earlier post I provided general reporting information that applies to taxpayers who participated in what reasonably appeared to be a legitimate investment for income tax purposes and turned out to be a fraudulent investment scheme.  The economic losses in these situations can be devastating when compounded by the fact there may be little to no tax relief given.  What if you feel the Canada Revenue Agency (CRA) has either misinterpreted….

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Canada Revenue Agency, Tax Issues

Estate Applied to Have Filings Made by Taxpayer Lacking Mental Capacity Set Aside

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In Ntakos Estate v. The Queen, 2018 TCC 224, a family business was owned by the deceased taxpayer, Anna (after her husband passed away in 1995) with two brothers-in-law through a holding corporation. Anna’s mental and physical health declined from 1995 until her death in 2004. She was diagnosed in 2002 with cancer, and apparently lacked mental capacity after that date. In 2003, the accountant for the family business got….

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Canada Revenue Agency, Capacity Law, Estate Administration, Family Conflict, Investments, Property, Small Business, Spouse, Tax Issues, Testamentary Capacity, Uncategorized
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