Working From Home During Covid-19

In order for home office expenses to be deductible against employment income, the employee must be required by contract to incur such expenses, and one of the following has to be met: The home is where the employee principally (more than 50% of the time) does their work.The employee uses the space exclusively to earn employment income, and it is used on a regular and ongoing basis for meeting clients, customers or other people in…

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Real Estate Sales: Taxable or Not?

In general, gains are fully taxable where the taxpayer buys a property with the intention to sell for a profit (sold on “account of income"). In other cases, half the gain is taxable (sold on “account of capital”). When a sale on “account of capital” involves the sale of a principal residence, the tax may be reduced or eliminated by using the principal residence exemption. In a December 13, 2019 French Tax Court of Canada…

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Property Flipping: Income or Capital?
House Flipping

Property Flipping: Income or Capital?

In an August 14, 2019 Tax Court of Canada case, at issue was whether the sales of four properties in B.C. were on account of income (fully taxable) or capital (half taxable), and whether they were eligible for the principal residence exemption (potentially tax-free) as claimed by the taxpayer, a real estate agent. Essentially, the Court was trying to determine if the properties were purchased with the intent to re-sell for a profit, or for…

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Reimbursement For Work Clothing: Taxable

In an April 17, 2019 Technical Interpretation, CRA was asked whether clothing reimbursements paid to maintenance employees were taxable benefits. Employees were not required to wear specific uniforms and were reimbursed based on receipts, to an annual maximum. CRA referred to Guide T4130 Taxable Benefits and Allowances, which states that clothing is generally a personal expense, except where either of the following applies: the employee is required to wear a distinctive uniform while carrying out…

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Special Work Site Allowance: Home Base Needed

In a January 29, 2019 Technical Interpretation, CRA discussed the criteria for tax-exempt allowances for board and lodging received for periods an employee was working at a special work site. To be a special work site, the following criteria must be met: the work performed at the location must have been of a temporary nature;the employee must have maintained a self-contained domestic establishment (SCDE) elsewhere which was used as their principal place of residence;the SCDE…

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Home Buyers’ Plan (HBP): Enhanced Possibilities

The HBP allows first-time home buyers to withdraw amounts from their RRSP to buy or build a home. Budget 2019 proposed to increase the HBP withdrawal limit to $35,000 from $25,000. As the HBP is available to each individual, a couple could access up to $70,000 to assist in a first-time home purchase.

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Commentary on the 2019 Federal Budget

On March 19, 2019 the Honourable Bill Morneau, Minister of Finance, presented the 2019 Federal Budget, Investing in the Middle Class, to the House of Commons. No changes were made to personal or corporate tax rates, nor to the inclusion rate on taxable capital gains.

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