A deemed disposition applies if you choose to convert a property from your principal residence to a rental property, or vice versa. This will result in a capital gain or loss on the property realized from the date of purchase until the date of the deemed disposition.
You’ve sold some real estate and turned a profit. Now it’s time to report the gain to the taxman. The problem is, you took back a mortgage on the sale, haven’t been paid, and the taxes on the gain are going to come out of your pocket!
There comes a time when owner-managed businesses can grow beyond the point where all aspects of the business are effectively manageable by the owner, and when hiring a competent financial controller starts to make sense.
Have you ever considered the possibility of lending yourself money in the form of a mortgage through your RRSP on a property you own?
What if you had enough money invested in your Registered Retirement Savings Plan (RRSP) to cover the remaining cost? Legally, an RRSP cannot own a piece of real estate, but it can lend money, in the form of a mortgage, for a piece of property. Many people are not aware of this option.
The last thing you want when you incorporate your business is for the Canada Revenue Agency (CRA) to label you a personal services business (PSB).
If CRA determines an incorporated individual working as a contractor is just an employee of the company they are working for, they would be deemed a PSB.
There are many advantages to incorporating, and despite the possible pitfalls, it may be beneficial for you to do so. But, it’s complicated and can be confusing. Talk to a tax specialist before you decide.
Although a tough decision, Tax Partner Patricia Day has decided to move on to a more rewarding career as a Grandmother. We wish her the best of luck in her retirement. Happy travels, Pat!
As you may already know, Finance Minister Bill Morneau released some additional comments the week of October 16th regarding the proposed tax changes. Here are the key points.
When the Department of Finance announced earlier this year that it was planning to end “income sprinkling,” GGFL was at the vanguard of local protest. It’s not news to anyone that the protests have grown and the issue has since become a major thorn in the federal government’s side. Along with the nation’s accountancy community and, collectively, our millions of clients, we anxiously await what we expect and hope will be significant changes to the proposed legislation.
The tax treatment of the sale of a company has been quite favourable to Canadian business owners for many years now. Beginning January 1, 2017 vendors won’t be so fortunate when it comes to an asset sale.
After 32 years of exemplary service to GGFL, it is with mixed emotions that we announce the retirement of Partner, Bruce Johnston.