In Gauthier, 2017 FC 1173, the taxpayer made a voluntary disclosure for 2005-2014 for income earned from funds he had transferred offshore in 1978. The CRA accepted the VD, waived penalties and cancelled interest for those years but then reassessed…
Rental income from a partnership as ABI
The CRA accepts that a business carried on by a corporation as a member of a partnership is not a specified investment business if the partnership employs more than five full-time employees. The authors suggest that a corporation could earn…
Effects of the new SBD clawback
From Jason Pisesky, “Incentive Effects of the New SBD Clawback” Canadian Tax Focus 4:4 (May 2018): an extra $1,000 of rental income creates $1,307 of immediate tax in Alberta, as…
Director liability
The taxpayer was not personally liable as a director of a corporation for unremitted HST and source deductions. She had signed the articles of the relevant corporation. But she had not signed an incorporation agreement, as required by BC law,…
Parking as a taxable benefit
An employee derives a benefit from free parking unless the employee must use the space “regularly” to perform his or her employment duties (ie for business purposes). Parking “to facilitate working irregular or extended hours is parking for business…
Requirements and investigations
In Bauer, 2018 FCA 62, the CRA commenced an investigation into whether the taxpayer had evaded taxes. The CRA investigator issued requirements to several banks under section 231.2 to obtain information on the taxpayer. The CRA then used that information…
Director escapes liability
Subsection 227.1(2) of the Income Tax Act (Canada) provides that a director is not personally liable for unremitted source deductions unless (a) a certificate for the amount of the corporation’s liability referred to in that subsection has been registered in…
CRA backs off on employment expenses
It appears the CRA has backed off its employment expenses project. A colleague of mine sent a release he received from CRA Audit, which read in part as follows: Effective immediately, the Agency will stop reviewing and disallowing “other employment…
Non-competes
We all know that section 56.4 of the Income Tax Act (Canada) is a hot mess. A recent CRA technical interpretation (2017-0688301I7) (TI) illustrates well one of the reasons why.
Flipping out
You buy a vacant lot, build a home on it, move into the home for a few weeks and then you sell the home for a tidy profit very soon thereafter. You claim the principal residence exemption (the PRE) so…