Personal Finance

Tax time! I'm a public accountant, so ask me, I'll try to respond frequently

  • Last Updated:
  • Oct 11th, 2019 7:45 pm
Jr. Member
Apr 1, 2009
115 posts
27 upvotes
Hello,

Rental property tax question.

I know that if i claim CCA on the property there would be a clawback upon disposition and so I have not ever claimed CCA on the property.

But, if I claim CCA on other items (appliances, wood fence/deck, etc) is there any clawback when selling a property down the line or are we allowed to claim proper CCA allowances on these items without any repurcussions of sale in the future.

Thanks.
Deal Addict
Aug 30, 2011
3299 posts
1026 upvotes
Ottawa
maxme09 wrote:
Nov 28th, 2018 5:38 pm
I am self employed sole proprietor and I did not have tax deductions on my pay for the year. I want to pay tax the for 2018 so that I do not go on tax installment next year.
https://www.canada.ca/en/revenue-agency ... nking.html
above list 3 ways to pay. Which one should I opt to pay for current year (2018)? Or I should just wait till I file the return?
In case you don't realize... you can't just pay what you owe to avoid paying by instalments. If you meet the requirement to pay by instalments https://www.canada.ca/en/revenue-agency ... ments.html then pre-paying your taxes payable in a lump sum will cost you instalment interest.
Newbie
Oct 13, 2015
81 posts
41 upvotes
Brampton, ON
OttawaGardener wrote:
Nov 29th, 2018 12:59 pm
In case you don't realize... you can't just pay what you owe to avoid paying by instalments. If you meet the requirement to pay by instalments https://www.canada.ca/en/revenue-agency ... ments.html then pre-paying your taxes payable in a lump sum will cost you instalment interest.
I am not on tax installment yet. I am trying to avoid being on it.
"If you earn income that has no tax withheld or does not have enough tax withheld for more than one year, you may have to pay tax by instalments."
It's not more than a year for me yet.
Deal Addict
Aug 30, 2011
3299 posts
1026 upvotes
Ottawa
maxme09 wrote:
Nov 29th, 2018 1:08 pm
I am not on tax installment yet. I am trying to avoid being on it.
"If you earn income that has no tax withheld or does not have enough tax withheld for more than one year, you may have to pay tax by instalments."
It's not more than a year for me yet.
I understand that. My point is that whether you prepay your 2018 taxes now or on April 30 makes no difference. For 2018 you do not have enough tax withheld, so if the situation is the same for 2019, you'll have to pay by instalments (if you otherwise meet the $ figure for Net Tax Owing).
Newbie
Oct 13, 2015
81 posts
41 upvotes
Brampton, ON
Gotcha, Thanks for the explanation. Now I see no point being pro-active.
Sr. Member
User avatar
Jul 29, 2013
803 posts
433 upvotes
I just got a phone call message from CRA T1 Matching Section regarding missing T5 box 13, interest.

Yes, I called the general CRA number to make sure it was a legitimate call. I had to call six times before I got through as the recording said they were busy so call back later. Surprised that they were so busy this time of year. Yes it was.

I returned the call to the CRA phone number left on answering machine and told the person the missing T5s were probably on my spouses tax form. They checked for a while and then asked me to send in my and my spouses Schedule 4 forms. I asked him do they not have it already as I Studio Taxed my 2017 to them? Could he not just look at the information sent to them?

Looking over all the T5 interest slips the missing slips were included on my spouse's income tax as spouse was the contributor of the money but my SIN was on the slip. For the last 10 years+ I have only had one T5 slip included on my form. The reason to change the investment to my name was to take advantage of CDIC insurance.

Questions:1. Why would they not look at the spouses's return to look for missing amount?
2. Schedule 4 is only going to give them a number from line 121 which they must already have.
3. Next year if I include the T5 on my tax form but say 0% owner will this solve the problem?

With the off-shore debacle and no action on it it seems CRA is wasting it's time on nickle and diming.
Deal Fanatic
User avatar
Nov 19, 2004
8587 posts
1623 upvotes
Cambridge, ON
profile wrote:
Nov 29th, 2018 11:09 pm
I just got a phone call message from CRA T1 Matching Section regarding missing T5 box 13, interest.

Yes, I called the general CRA number to make sure it was a legitimate call. I had to call six times before I got through as the recording said they were busy so call back later. Surprised that they were so busy this time of year. Yes it was.

I returned the call to the CRA phone number left on answering machine and told the person the missing T5s were probably on my spouses tax form. They checked for a while and then asked me to send in my and my spouses Schedule 4 forms. I asked him do they not have it already as I Studio Taxed my 2017 to them? Could he not just look at the information sent to them?

Looking over all the T5 interest slips the missing slips were included on my spouse's income tax as spouse was the contributor of the money but my SIN was on the slip. For the last 10 years+ I have only had one T5 slip included on my form. The reason to change the investment to my name was to take advantage of CDIC insurance.

Questions:1. Why would they not look at the spouses's return to look for missing amount?
2. Schedule 4 is only going to give them a number from line 121 which they must already have.
3. Next year if I include the T5 on my tax form but say 0% owner will this solve the problem?

With the off-shore debacle and no action on it it seems CRA is wasting it's time on nickle and diming.
First off, you need to be clear as to who the contributor is. You can't just arbitrarily say you are contributing or or spouse is. Basically if you both have the same income, you divide the interest 50/50 regardless of whose account it is in (so changing the account for CDIC purposes means nothing). If you make 70% of the income, then they are going to expect you to have contributed 70% of the savings and therefore you are claiming 70% of the interest. That is simplified, but just want to clear that up now before you start claiming one spouse is the "owner".

Just send them what they ask for. If they are asking for schedule 4, then give them schedule 4. If you did it in Studio Tax, this should be a simple matter to give them schedule 4 from both returns. They likely want to see any breakdown of the line and look at the details of who is claiming what.
Sr. Member
User avatar
Jul 29, 2013
803 posts
433 upvotes
don242 wrote:
Nov 30th, 2018 7:10 am
First off, you need to be clear as to who the contributor is. You can't just arbitrarily say you are contributing or or spouse is. Basically if you both have the same income, you divide the interest 50/50 regardless of whose account it is in (so changing the account for CDIC purposes means nothing). If you make 70% of the income, then they are going to expect you to have contributed 70% of the savings and therefore you are claiming 70% of the interest. That is simplified, but just want to clear that up now before you start claiming one spouse is the "owner".

Just send them what they ask for. If they are asking for schedule 4, then give them schedule 4. If you did it in Studio Tax, this should be a simple matter to give them schedule 4 from both returns. They likely want to see any breakdown of the line and look at the details of who is claiming what.
Thanks don242 for replying. I should made the situation clearer.

We have consistently made it clear for the last 10+ years on the income tax forms who the contributors are. I have had one T5 and my spouse five T5.

I did not arbitrarily pick a percentage. The spouse who earned or inherited the money included it in their income tax.
I agree with you that changing the account for CDIC purposes means nothing as the contributor remains the same. We followed the attribution rules and put the interest on the tax form of the person who contributed it not the person whose SIN was on the slip. So why does the CRA not acknowledge we are following their rules? Would they not check the spouse's tax form to see if the missing T5 interest was included?

I sent in both Schedule 4 sheets with a break down of the inclusion of T5 on each. CRA should have our tax forms already including Schedule 4 and copies of all the T5.

They have the information they could have done it themselves. Just make sure all T5 are accounted for and check on past years returns to look for consistency in reporting interest.
Deal Addict
Mar 10, 2010
1129 posts
231 upvotes
My experience with them is that they don't check the spouses return at all, and they also won't do any work themselves to figure out the numbers. They'll request you do it, and as long as your numbers add up to the totals they have they're fine with it. Unless of course they lose your paperwork, don't tell you about it, and then reassess you as if you hadn't provided them any information (which I hope doesn't happen in your case).
profile wrote:
Nov 30th, 2018 9:57 pm
Thanks don242 for replying. I should made the situation clearer.

We have consistently made it clear for the last 10+ years on the income tax forms who the contributors are. I have had one T5 and my spouse five T5.

I did not arbitrarily pick a percentage. The spouse who earned or inherited the money included it in their income tax.
I agree with you that changing the account for CDIC purposes means nothing as the contributor remains the same. We followed the attribution rules and put the interest on the tax form of the person who contributed it not the person whose SIN was on the slip. So why does the CRA not acknowledge we are following their rules? Would they not check the spouse's tax form to see if the missing T5 interest was included?

I sent in both Schedule 4 sheets with a break down of the inclusion of T5 on each. CRA should have our tax forms already including Schedule 4 and copies of all the T5.

They have the information they could have done it themselves. Just make sure all T5 are accounted for and check on past years returns to look for consistency in reporting interest.
Deal Fanatic
User avatar
Nov 19, 2004
8587 posts
1623 upvotes
Cambridge, ON
profile wrote:
Nov 30th, 2018 9:57 pm
Thanks don242 for replying. I should made the situation clearer.

We have consistently made it clear for the last 10+ years on the income tax forms who the contributors are. I have had one T5 and my spouse five T5.

I did not arbitrarily pick a percentage. The spouse who earned or inherited the money included it in their income tax.
I agree with you that changing the account for CDIC purposes means nothing as the contributor remains the same. We followed the attribution rules and put the interest on the tax form of the person who contributed it not the person whose SIN was on the slip. So why does the CRA not acknowledge we are following their rules? Would they not check the spouse's tax form to see if the missing T5 interest was included?

I sent in both Schedule 4 sheets with a break down of the inclusion of T5 on each. CRA should have our tax forms already including Schedule 4 and copies of all the T5.

They have the information they could have done it themselves. Just make sure all T5 are accounted for and check on past years returns to look for consistency in reporting interest.

OK. No concerns on the attribution rules then. I just wanted to make it clear since this is a common thing people get into trouble with. Sounds like you are fine. As Clacker mentioned, they ask you to provide the explanation. They don't do the investigating first. It is not necessarily that anything was really flagged. It could just be a random check.

They asked me to verify something this year that hasn't changed over the last 10 years. Seems pointless to me when the history is there (plus a ruling from years ago). But the way our system works means that they do these checks every so often and want you to provide the answer. No big deal as long as everything is copasetic.
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User avatar
Feb 19, 2010
5909 posts
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YYC1978 wrote:
Nov 28th, 2018 12:22 pm
T2125 - Capital Cost Allowance claiming

If I buy equipment this year in December but won't be able to use it until April next year:

- Do I have to list it in "Area A" of the T2125 for this tax year? I will not claim CCA on this equipment in this tax year.

- Can I list it in the T2125 next tax year and claim full CCA (without the half year rule)?
Add it for 2018 and override the CCA claim accordingly. Then you can legitimately claim full CCA on it in 2019 without any issues.
Newbie
Aug 12, 2017
19 posts
9 upvotes
Yes, you can claim CCA on any internal appliances, which would be considered chattel without any problems. I work in public accounting and have done this many, many times without any problem.

For the fence, when you go and sell the property and a value is assigned to the fence, then you might have to pay a small amount of recapture (on the CCA previously taken). If the property is sold, nothing references the fence in the purchase & sale agreement, you might be able to get away with no issue. Especially if upon sale you taken the approach that the fence is zero/it needs to be replaced anyway. I have seen this once, a student residence in Hamilton but the fence had co-lapsed before the time of sale, so it would be a non issue.

The deck I have never seen before. If I was doing your return when you sold the property, I would approach it the same way. Value assigned to deck, no more then the actual NBV.

Cottager

Clarky wrote:
Nov 29th, 2018 11:54 am
Hello,

Rental property tax question.

I know that if i claim CCA on the property there would be a clawback upon disposition and so I have not ever claimed CCA on the property.

But, if I claim CCA on other items (appliances, wood fence/deck, etc) is there any clawback when selling a property down the line or are we allowed to claim proper CCA allowances on these items without any repurcussions of sale in the future.

Thanks.
Newbie
Jul 15, 2011
14 posts
5 upvotes
BURNABY
Hi,

I have a question about vehicle leasing expenses and have been reading available info. on Google and the CRA website. But, it's still very confusing.

If I, a flooring contractor, am leasing a Benz Sprinter Van, is this considered a "passenger" vehicle or a "motor" vehicle? I'm leaning towards the latter but haven't been able to find a clear cut answer.
This leads to my other question where if it is a "motor" vehicle, am I allowed to deduct the business portion of the monthly lease amount (I keep a mileage log and claim all KMs except for drives going home at the end of the day and drives to grab lunch) and ignore the $800 limit?

Finally, I am in BC and my lease payments comprises of lease + GST (5%) + PST (10%); do I deduct the full 10% of the PST or the 7% PST? The GST I assume will not be deductible as I will be claiming an ITC when filing my GST returns.

As an example, if my lease payment is $1000 + $50 GST + $100 PST (10%) = $1150 and the business portion of my vehicle usage was 90%, can I claim ($1000 + $100)*90% or ($800 + $56)*90%?

Thank you so much.
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User avatar
Mar 1, 2006
14381 posts
228 upvotes
I had to "gift" my broker some shares, because that particular stock is no longer able to be traded by a Canadian person anymore. The lady over the phone from my broker said that I would still be able to claim the losses.

Just wanted to confirm that I would be able to claim the losses and if so, how would I go abouts doing that? Because this will not show up as a part of my yearly trades as it was not considered a trade.
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Feb 1, 2006
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I'm self employed and have a question about claiming a credit card annual fee as a business expense.

I understand that I can definitely claim this on a "Business credit card" like the Amex SPG Business Card providing I charge business expenses to it.

My question is if I use a regular, non-business credit card for both personal and business expenses (I have very few, less than 5 per year) can I claim the annual fee as above?
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