Capital Dividends

They say the best things in life are free. That’s what Capital Dividends are to …

They say the best things in life are free. That’s what Capital Dividends are to shareholders of Canadian small businesses. When a Canadian controlled private corporation generates a capital gain from the sale of investments or the sale of capital assets, such as land or business goodwill, one half of the gain is subject to corporate income tax. So what happens to the other half of the gain? How to Pay your shareholders tax-free? The …

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Should I Incoporate my Practice

Should I Incorporate my Practice?

Should I incorporate my practice? This is a common question for medical and dental professionals and it is one that has become increasingly more relevant since the new tax on split income (“TOSI”) rules were introduced in 2017. Determining whether or not incorporation is right for your practice is not straightforward and can be costly if you make the wrong decision. To begin the process of determining whether or not you should incorporate, consider the …

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Tax Time Fall Economic Updates Dec 2018

Tax Time – Fall Economic Updates – December 2018

The Federal, Ontario and Quebec governments have all issued Fall Economic Updates over the course of the last several weeks. We have summarized the key items from each update below. FEDERAL ECONOMIC UPDATE On November 21, 2018, Finance Minister Bill Morneau released the Liberal government’s Fall Economic Statement projecting continuing spending deficits into the 2022-2023 fiscal years. The government is proposing three immediate changes to Canada’s tax system, in order to enhance business confidence in …

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Tax Time - Tax Planning using Private Corporations

Tax Time: Tax Planning using Private Corporations

On July 18, 2017, the Department of Finance released a consultation document and draft legislation containing proposals that, if enacted, will significantly affect many private companies and their shareholders. Here is a brief summary of the proposed changes and how they will impact business owners. INCOME SPRINKLING Income sprinkling refers to splitting income with family members who are in a lower tax bracket. Existing “kiddie tax” rules in the Income Tax Act limit income sprinkling …

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Changes to Reporting Principal Residence Sales

Changes to Reporting Principal Residence Sales

While the thrust of their proposals was directed towards preventing the use of the principal residence exemption (“PRE”) by non-residents as well as limiting its use for properties owned by certain trusts, all taxpayers who own a residence and use it (or a portion thereof) for their personal use will be affected by these proposals. Prior to this announcement, the Canada Revenue Agency (“CRA”) had a long-standing administrative position which allowed the majority of home …

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To Buy or to Lease - that is the Question

To Buy or Lease – That is the Question

One of the questions that we get asked a lot by clients is whether it is better to lease or to buy a vehicle. The tax consequences are quite different depending on what option you choose. Buying If you purchase a vehicle then you can only claim a percentage of the vehicle’s cost as capital cost allowance (i.e. depreciation) each year. The first year you are entitled to claim 15% of the cost and in …

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