Entrepreneurship & Small Business

Am I doing this correctly?

  • Last Updated:
  • Feb 28th, 2020 6:04 am
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Member
Jul 8, 2017
219 posts
124 upvotes

Am I doing this correctly?

US/CA citizen

Jan 1-20, 2020: CDN resident. CDN sole prop operating under BN 1.

Jan 21 - Feb 27, 2020: US resident. US sole prop operating under BN 1.

Feb 28 - Dec 31, 2020: US resident. US LLC operating under BN 2.

(Jan 21, 2020 I ceased being CDN tax resident and changed my BN business address to my US address and began operating as my US sole prop. I have NO permanent establishment in Canada starting Jan 21, 2020.)

Please tell me if I am doing this correctly...

For Jan 1-20, 2020 ill file my final CDN return. My T2125 will show my income and GST/HST collected during this time.

Before Apr 30, 2020 I will file and remit my GST/HST installment for amount I collected between Jan 1 - Feb 27 using BN 1. My sales figures will be much higher then what will be shown in my Jan 1-20, 2020 T2125 return as I will be reporting my sales and GST/HST collected during my time as a US sole prop as well.

1) Will the GST/HST remittance having a higher sales / tax collection value raise flags or concerns?

2) My Jan 1-20, 2020 T2125 return will have a closing inventory valuation of about $10k (which is true). Is this fine or must I expense it as I am no longer a CDN tax resident Jan 21, 2020?
1 reply
Sr. Member
User avatar
Dec 28, 2010
650 posts
298 upvotes
So are you a US resident as from Jan 21? Changing the address doesn't change the status of your nationality. If you are a US resident you should let the CRA know because now you are a non-resident and that changes your registration as a sole prop. And that will raise flags. To answer your other questions it's important to where you provide supply, in the US or Canada
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