Personal Finance

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

  • Last Updated:
  • Jan 20th, 2018 11:09 pm
Deal Fanatic
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Nov 19, 2004
7262 posts
1017 upvotes
Cambridge, ON
darrenm01 wrote:
Jan 11th, 2018 7:39 pm
Hello,

I made an RRSP contribution in January 2017 for my maximum for the year. Then in July 2017 I signed up for a company RPP which had about $3000 in total contributions by the end of 2017.

Problem is this put me over my RRSP limit for 2017. I believe there is a lifetime $2000 amount you can over contribute and not claim, but not be penalized for, either.

This still leaves around $1000 - what’s the best way to deal with this (given nothing has been filed yet)?

Thanks!
Darren
At this point there is nothing to be done. For the months you overcontributed you will have to pay the penalty. Hopefully only the last month or two. But now that it is 2018, you should be OK since you have new contribution room.
Deal Addict
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Jan 27, 2007
4882 posts
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Peterborough
darrenm01 wrote:
Jan 11th, 2018 7:39 pm
Hello,

I made an RRSP contribution in January 2017 for my maximum for the year. Then in July 2017 I signed up for a company RPP which had about $3000 in total contributions by the end of 2017.

Problem is this put me over my RRSP limit for 2017. I believe there is a lifetime $2000 amount you can over contribute and not claim, but not be penalized for, either.

This still leaves around $1000 - what’s the best way to deal with this (given nothing has been filed yet)?

Thanks!
Darren
Did you deduct the january 2017 contribution on your 2016 return?
Deal Addict
User avatar
Jan 27, 2007
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Peterborough
canada2014 wrote:
Jan 11th, 2018 7:41 am
I’am Canadian citizen current living in Australia ( just received permanent residency). I have been away from Canada for more than a year now. Do I need to file my tax for 2017? If yes, how?

Can I file tax in Australia and Canada ?

Thanks for the reply!
Too many variables. Go to the CRA website and search for their guide on residency.
Newbie
Jun 5, 2010
14 posts
1 upvote
Nova Scotia
No, the contribution in January was made planning to use it for my 2017 return. So none of this factors in to the 2016 tax year.
Newbie
Apr 29, 2017
71 posts
10 upvotes
I will be going to an accountant soon but one question. If I collected a $5000 deposit for a job in late December and cashed it, but just finished the job and finally billed them for it all now, do I leave the 5k behind on our taxes for 2017 or will it be for this year?
Newbie
Jan 12, 2017
55 posts
37 upvotes
vancouver
I bought my condo at 430k (around 460k after taxes) in 2012 presale.
Notice of assessment was:
400k in 2014
420k in 2015
610k in 2017
Sold for 630k 2018 January

I lived in unit in 2013 and 2014
Rented unit out 2015-2017

Am I suppose to pay capital tax gain difference of year 2015 and sold price? 630k minus 420k = 110k capital? I want to somehow pay capital difference of my purchase 460k (post tax)... any way of doing that?
Member
May 3, 2016
269 posts
16 upvotes
Question on T1135.

For cash residing in a foreign bank, balance unchanged since 2016. When reporting the T1135 for 2017, should I use the 2017 exchange rate or should I keep the CAD translated year end from my 2016 T1135?

The exchange rate fluctuates quite a bit and if I use the 2017 rate, the CAD translated amount would be higher than that of 2016. Income is zero but year end balance is higher than last year. Don't want to make CRA suspect I have foreign income not reporting, when I indeed don't have any.
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Nov 19, 2004
7262 posts
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Cambridge, ON
lazylazybum wrote:
Jan 12th, 2018 12:17 am
I bought my condo at 430k (around 460k after taxes) in 2012 presale.
Notice of assessment was:
400k in 2014
420k in 2015
610k in 2017
Sold for 630k 2018 January

I lived in unit in 2013 and 2014
Rented unit out 2015-2017

Am I suppose to pay capital tax gain difference of year 2015 and sold price? 630k minus 420k = 110k capital? I want to somehow pay capital difference of my purchase 460k (post tax)... any way of doing that?
If in 2014 this ceased being your principal residence, then the value at that point would be what you subtract from your selling price to determine the capital gains. Of course any costs incurred in selling would be deducted.
Deal Fanatic
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Nov 19, 2004
7262 posts
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Cambridge, ON
Mitts87 wrote:
Jan 11th, 2018 11:57 pm
I will be going to an accountant soon but one question. If I collected a $5000 deposit for a job in late December and cashed it, but just finished the job and finally billed them for it all now, do I leave the 5k behind on our taxes for 2017 or will it be for this year?
When you are a contractor it is based on when the work is done and invoiced. I'd say the 5000 stays back in 2017.
Sr. Member
Jun 10, 2008
949 posts
82 upvotes
barricuda wrote:
Jan 11th, 2018 7:09 am
2017 RRSP contribution room = 19,000
2017 Employer Pension Adjustment = 11,000 (3,000 Employee Contributions 8,000 Employer Contributions)
Bonus paid out in Feb 2018 transferred directly to RRSP = 10,000

How much of the 10,000 RRSP contribution can I claim as deduction in my 2017 taxes?

1) The entire 10K and my 2018 contribution room will be reduced by the additional 2K (assuming I have enough 2018 room) or
2) Only 8K since that was the only remaining room for 2017 and the additional 2K will carryover eligible to be claimed in the 2018 tax year onwards?

Logically, option 2 seems to be the right answer but I was tinkering around in SimpleTax by increasing the RRSP contribution amounts - instead of the 10K above if I entered 19K, it actually deducted the full 19K + the 3 K from the pension adjustment, and did not give me a number for my 2018 contribution room (If I entered only 10K then it shows me an adjusted 2018 contribution room). That can't be right is it?
Bump
Newbie
Nov 25, 2013
57 posts
27 upvotes
don242 wrote:
Jan 12th, 2018 4:57 pm
If in 2014 this ceased being your principal residence, then the value at that point would be what you subtract from your selling price to determine the capital gains. Of course any costs incurred in selling would be deducted.
Correct in this case, but there is a better way to save tax. If at the time in 2014 tax year-end which is the time you moved out and CRA denotes that as a change in use, you had filed a s. 45(2) election, you would be able to use the principal residence exemption for up to 4 years at the time of sale, even if the property is not inhabited during those years by the taxpayer as long as you are a deemed resident of Canada.

This is a good source to read - https://www.taxtips.ca/personaltax/prop ... einuse.htm

Exercpt from tax tips:
"The taxpayer may also defer recognition of the resulting capital gain (if any) by electing under subsection 45(2) of the Income Tax Act to be deemed not to have made the change in use. This defers the recognition of the capital gain until the property is ultimately sold. This election cannot be made if there is only a partial change in use of the property. The election should be made when the change in use happens. Once this election has been made, the property can still qualify as the taxpayer's principal residence for up to 4 taxation years, even if the property is not inhabited during those years by the taxpayer. However, the taxpayer must still be a resident or deemed resident of Canada during those years in order to designate the property as the principal residence.

For example, assume a taxpayer rented out their principal residence on June 1, 2006, after living in it since 1996, and moved into a friend or relative's home. The taxpayer filed a s. 45(2) election for the 2006 taxation year. The taxpayer sold the former principal residence in 2012. No capital cost allowance was claimed during the years 2006 to 2012 while the home was rented out.

If the election had not been filed:
  • There would have been a deemed disposition in 2006 at fair market value (FMV), with any gain sheltered by the PRE.
  • When the home was subsequently sold in 2012 there would be a capital gain based on the increase in FMV since the deemed disposal.
Because the election was filed:
  • The change in use was deemed not to occur, so there was no deemed disposal in 2006.
  • When the home was subsequently sold in 2012 there would be a capital gain based on the increase in FMV since the home was purchased in 1996. The number of years sheltered by the PRE would be 11 (1996 to 2006 inclusive) plus 1 (normal rule for PRE) plus 4 (re s. 45(2) election), for a total of 16 years. The home was owned for 17 years (1996 to 2012 inclusive), so the PRE would shelter 16/17ths of the total gain.
Edit: The bullets messed up.
Newbie
Feb 9, 2016
47 posts
1 upvote
If I transfer a principal residence to my wife at cost, do I need to report this on schedule 3 principal residence?
Deal Addict
Aug 30, 2011
2683 posts
623 upvotes
Ottawa
fbjin01 wrote:
Jan 13th, 2018 2:43 am
If I transfer a principal residence to my wife at cost, do I need to report this on schedule 3 principal residence?
What do you mean? She is paying something or you're just adding her to the title?
Newbie
Feb 9, 2016
47 posts
1 upvote
OttawaGardener wrote:
Jan 13th, 2018 8:04 am
What do you mean? She is paying something or you're just adding her to the title?
My name was on the title and now only her name is on the title. No cash paid
Sr. Member
Jul 27, 2017
586 posts
178 upvotes
GTA
A request for help with the following

$10,000 of trust units purchased 10 years ago paying 10%/yr distributions as return of capital (ROC)

At the end of 10 years the 'adjusted cost base' (ACB) is $0 & the value of the trust units is still $10,000

At 10 years + 1 day

a) If I were to sell the $10,000 worth of trust units, what is the tax consequence?

b) if I continue to hold the trust units for another 10 years, what would be the tax consequence?

Thanks
Last edited by porticoman on Jan 13th, 2018 1:02 pm, edited 1 time in total.

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