Loans for Value: Income Splitting Tool

Special attribution rules prevent the shifting of income between certain related people (including a spouse, parent, grandparent, sibling, uncle or aunt). Consider the situation where high-earning Spouse A gives investments to low-earning Spouse B so that investment income can be taxed at Spouse B's lower tax rate. The attribution rules prevent this by requiring the earnings to be taxed in the hands of the transferor, Spouse A. However, these rules do not apply where the…

Continue Reading Loans for Value: Income Splitting Tool
  • Post category:Tax Planning

Real Estate Projects: Watch Out!

General CRA activity Over the last few years, CRA has focused on purchases and sales within the real estate sector. They are reviewing transactions for several items, such as: property flips on account of income;ineligible principal residence claims;commissions on sales;pre-sale condo assignments; andeligibility for the GST/HST new housing and rental rebates. One method for reviewing such transactions is by requiring taxpayers to respond to a detailed questionnaire. The questionnaire covers items such as: date and…

Continue Reading Real Estate Projects: Watch Out!
  • Post category:Tax Planning