Tax Issues

Total 356 Posts

The Prescribed Rate is About to Change – for Real this Time?

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The prescribed rate is the minimum interest rate prescribed by the Canada Revenue Agency (“CRA”) that should be charged on various non-arm’s loans such as those made by you to your spouse or child (through a family trust). Such loans are a common device to split income with others in your family. The money is often used to invest in income-producing properties and the income is taxable in the hands….

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Canada Revenue Agency, Estate Planning, Interest, Investments, Property, Real Estate, Tax Issues, Uncategorized

Tidbits from the CRA

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Earlier this week I had the pleasure of attending STEP Canada’s 19th National Conference, where I, along with over 700 other trust and estates professionals from across Canada, had the opportunity to hear from engaging and thought-provoking speakers on a diverse range of trust and estates topics. One of the plenary sessions every year at the Conference, which attendees particularly anticipate, is the STEP Canada/CRA Round Table, where senior representatives….

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Spouse, Tax Issues, Wills

Old Age Security Clawback – Grossed-Up vs Actual Dividends

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The Canada Revenue Agency (CRA) was reminded by a taxpayer individual about a perceived lack of fairness when required to include the dividends received at a grossed-up amount when calculating net income rather than only including the actual amount of dividends received. The taxpayer felt this was unfair because net income is used to calculate the reduction his or her old age security (OAS) pension. In their response the CRA….

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Canada Revenue Agency, Estate Planning, Tax Issues

JOINT TENANCY AND PROBATE AVOIDANCE – A QUICK REVISIT

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When developing estate plans for clients with property of a capital nature (real estate, marketable securities being a couple of examples), one of the questions I get asked more often than not is: How can I avoid probate? Can I just put someone else’s name on a document so it transfers to that person when I pass away? Are there any implications? Technically speaking, “putting someone else’s name on a….

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Business Succession Planning, Canada Revenue Agency, Estate Administration, Estate Administration and Probate Applications, Estate Planning, In the News, Interest, Investments, Joint Tenancy, Probate Tax, Property, Real Estate, Resulting Trust, Tax Issues, Trusts, Uncategorized, Wills

Gift returned receipt required

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The Canada Revenue Agency was asked to speak to the implications of a gift return and their response included some commentary on the impact on the donor. The situation the CRA was asked to consider involved an individual taxpayer who, in 1981, gave a whole life insurance policy to a charitable foundation raising funds to support a specific college. The gift was made on the condition that the funds be….

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Canada Revenue Agency, Charitable Giving, Estate Donations, Executors, Insurance, Philanthropy/Charitable Giving, Tax Issues

TAXATION OF DEPRECIABLE PROPERTY TRANSFERS INVOLVING TRUSTS

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Pursuant to a certain provision of the Income Tax Act (“ITA”), if in the transfer of depreciable property between related parties, the actual cost to the transferee would otherwise exceed the capital cost (for tax purposes) to the transferor, the capital cost to the transferee is limited to the sum of the capital cost to transferor and the transferor’s taxable capital gain on the property minus any related capital gains….

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Canada Revenue Agency, Estate Administration, Estate Planning, Investments, Real Estate, Tax Issues, Trusts
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