Contributions of Goods or Services to a Non-Profit Organization: Tax Implications

In a January 6, 2020 Technical Interpretation, CRA considered whether a deduction was available to suppliers who contributed in-kind goods or services to an NPO withthe expectation that they would benefit from word of mouth advertising and promotion. Where the supplier is providing goods or services to an NPO in exchange for advertising and/or promotional services, a barter transaction may have occurred. As such, the typical rules for barter transactions would apply. In arm's length…

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Home Accessibility Renovation Credit: Increase in Home Value?

When applying for the home accessibility tax credit (HATC), valued at 15% of up to $10,000 in expenditures per year, does it matter if the renovation increases the value of my home? Yes, and No. In a December 12, 2019 Tax Court of Canada case, at issue was whether the taxpayer was eligible for a HATC claim for $10,000 of qualifying renovations for the 2016 year, the first year of this credit. The taxpayer’s spouse…

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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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Reporting Tips for Service Workers
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Reporting Tips for Service Workers

Tips received by servers and other individuals in the service industry are taxable. However, since tips do not show up on T4 slips, some taxpayers are under the false understanding that they are either not taxable, or only partially taxable. In a February 3, 2020 Federal Court of Appeal case, the Court upheld the Tax Court decision that tips received by the taxpayer from his employment as a slot attendant at a casino were properly…

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Starting a Business and Not Getting Paid: Can I Collect EI?

In a January 10, 2020 Federal Court of Appeal case, the Court conducted a judicial review of the denial of the taxpayer’s EI benefits. While receiving benefits in 2010 and 2011, the taxpayer had incorporated a corporation and engaged in preliminary work to set up its business. In early 2015, the Canada Employment Insurance Commission (CEIC) was advised by CRA that the taxpayer had applied for a business registration number while collecting EI. A taxpayer can operate a business while collecting EI benefits where his business activity is to such a minor extent that a person would not normally rely on…

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May 15, 2020 Update
CRA National Headquarters in Ottawa, ON

May 15, 2020 Update

This week has brought another program to assist business owners (not sole proprietors), who did not qualify or were turned down for the Canada Emergency Business Account loan ($40K). This is an interest free loan, with a forgivable component (if certain conditions are met). Mind you, the contribution is also taxable. The “Regional Relief and Recovery Fund (RRRF)” is delivered to Western Canadian businesses through the Western Economic Diversification Fund (WD).  The funding available is…

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Update May 8

75% wage subsidy program (Canada Emergency Wage Subsidy “CEWS”) Please see the following link to our newsletter provider for important clarifications. Such as what is defined as eligible wages (dividends do not count), periods for the calculation and other items.  https://www.videotax.com/web-tips-articles/cews-faq-updated-partnerships Canada Child Benefit (CCB) Increase Families will receive an additional $300 per child as a one time increase to May’s payment.  https://pm.gc.ca/en/news/news-releases/2020/05/03/families-receive-increased-support-through-canada-child-benefit Province of BC, $1,000 Emergency Benefit for workers On May 1st, applications…

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COVID-19 Response

For information about how to pick up your tax material that you dropped off please click here. Our office is closed to the public and we are unable to offer an estimated time your tax return will be completed – we will call you when it is ready. Create a 2020 folder with your nameScan or take a photo of all your papers to the folder using appropriate file namesUpload your contents (or create one…

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Trusts for Disabled Beneficiaries: Good News!

One common planning technique for disabled individuals involves the use of a trust under which the trustees possess ultimate discretion over any distributions to be made. In other words, the beneficiary has no enforceable right to receive any distributions from the trust unless or until the trustees exercise their discretion in the beneficiary’s favour. The intent of such a trust is that the trust assets not be considered assets of the beneficiary, such that they…

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