Personal Finance

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

  • Last Updated:
  • Sep 11th, 2018 12:40 pm
Deal Addict
User avatar
Dec 24, 2005
2112 posts
2649 upvotes
Toronto
Is JamesCPA (OP) still answering questions on this thread? I don't see a response from him since 2016. I'll ask my question anyway, hopefully someone else here can help:

I have a rental property that is need of new windows, which is going to cost upwards of $15k. I'd like to use money from an existing loan (a HELOC on my principal residence) to pay for the windows, then use the interest paid as a tax deduction on the rental income. Does the CRA allow using any loan interest to be used as a tax deduction, i.e. in this case the loan is a HELOC from my principal residence but not from my rental property, or does it have to be a loan that's leveraged on the rental property itself, i.e. do I have to get a HELOC on my rental property?
Nothing to see here folks...
Member
Dec 7, 2006
446 posts
82 upvotes
Toronto
My wife and I have never filed our taxes together (no particular reason, we just never waited for the other to file and do it ourselves). My understanding is that the primary benefit is the ability to maximize a return if there is a primary "breadwinner". Are there any benefits to filing together if we both make a similar (high) income?

Thanks!
Newbie
Jan 18, 2017
81 posts
51 upvotes
The breakdown of the yearly distributions will be detailed on the annual T3 you receive. For example, assuming that for the period Jan-Dec/17 you received $100/mo for that period, you'll get a T3 in Feb/18-ish that shows you received $1,200 total for the 2017 year, and of that $1,200 received, $600 was interest, $400 was eligible dividends, $100 was capital gains dividends, and $100 was foreign income.

Every year the T3 will detail the specific income "blend" that made up the monthly payments made to you.
porticoman wrote:
Jan 19th, 2018 4:21 pm
Thank you

on #2, on the basis no further capital contributions just the original $10,000 investment, if I continue to hold that for say another 10 years, are the ongoing/yearly distributions considered capital gain in each & every year that I hold the stock from year 10+1day to year 20?
______
Canadian & US tax guy
Newbie
Jan 18, 2017
81 posts
51 upvotes
Short answer is yes, that is fine. In CRA's eyes a loan is a loan. Just make sure you keep decent records that clearly show that the HELOC loan was advanced for the window purchases.
loonieryan wrote:
Jan 20th, 2018 10:13 am
Is JamesCPA (OP) still answering questions on this thread? I don't see a response from him since 2016. I'll ask my question anyway, hopefully someone else here can help:

I have a rental property that is need of new windows, which is going to cost upwards of $15k. I'd like to use money from an existing loan (a HELOC on my principal residence) to pay for the windows, then use the interest paid as a tax deduction on the rental income. Does the CRA allow using any loan interest to be used as a tax deduction, i.e. in this case the loan is a HELOC from my principal residence but not from my rental property, or does it have to be a loan that's leveraged on the rental property itself, i.e. do I have to get a HELOC on my rental property?
______
Canadian & US tax guy
Jr. Member
Aug 29, 2011
193 posts
146 upvotes
GTA
PC_YYZ wrote:
Jan 20th, 2018 12:10 pm
My wife and I have never filed our taxes together (no particular reason, we just never waited for the other to file and do it ourselves). My understanding is that the primary benefit is the ability to maximize a return if there is a primary "breadwinner". Are there any benefits to filing together if we both make a similar (high) income?

Thanks!
There may be advantages in pooling all family medical expenses or charitable donations on one return versus two. Thus the overall family refund may be greater.
The Duke
Newbie
Oct 29, 2013
61 posts
Winnipeg
Hey, thanks for providing your help to us! I have a question too. My employer matches our RRSP with DPSP. So I contribute 4% to RRSP, the employer matches 4% with DPSP. I know we can get tax refunds for contributing to RRSP. But do the employer's contribution to DPSP count when getting the tax refund?

I feel like this is a stupid question, but I cannot find anything on Google about getting tax refund for DPSP contribution.

Thanks for your help.
Deal Addict
Aug 30, 2011
2969 posts
751 upvotes
Ottawa
PC_YYZ wrote:
Jan 20th, 2018 12:10 pm
My wife and I have never filed our taxes together (no particular reason, we just never waited for the other to file and do it ourselves). My understanding is that the primary benefit is the ability to maximize a return if there is a primary "breadwinner". Are there any benefits to filing together if we both make a similar (high) income?

Thanks!
There are no joint returns in Canada. If you use tax software and complete both returns at the same time, the software will adjust medical and charitable claims, as garytheduke said. If you don't indicate your spouse's income, the CRA will match the returns to allow family income for credits, and to verify lower income spouse for child care expenses.

I'm assuming you are both indicating the correct marital status.
Member
Dec 7, 2006
446 posts
82 upvotes
Toronto
OttawaGardener wrote:
Jan 20th, 2018 3:30 pm
There are no joint returns in Canada. If you use tax software and complete both returns at the same time, the software will adjust medical and charitable claims, as garytheduke said. If you don't indicate your spouse's income, the CRA will match the returns to allow family income for credits, and to verify lower income spouse for child care expenses.

I'm assuming you are both indicating the correct marital status.
We do specify that we are married but I always leave the spouse income blank (usually because I do mine right away and don't want to wait!). Thanks for the response, exactly what I was looking for.
Deal Addict
Aug 30, 2011
2969 posts
751 upvotes
Ottawa
PC_YYZ wrote:
Jan 20th, 2018 3:38 pm
We do specify that we are married but I always leave the spouse income blank (usually because I do mine right away and don't want to wait!). Thanks for the response, exactly what I was looking for.
To avoid the problem of the software thinking you (or your spouse) is entitled to the spousal amount, good idea to put a guesstimate for the spousal net income.

And to clarify... the CRA won't adjust medicals or charitables when they match the returns, because you can choose which spouse makes the claims (or you can both claim your own charitables).

Since you indicated that both you and your spouse are high income earners, the credits that would be affected by family income (like GST credit and CCTB) won't apply to you.
Newbie
Oct 29, 2013
61 posts
Winnipeg
I understand that moving expense, when moving far enough for a job, are refundable. But is 100% of the cost refundable? Or how many percent of the cost? I spent over $3000 to move between provinces last time. Will I get over 3000 refunded from my income tax? Thanks!
Deal Addict
Aug 30, 2011
2969 posts
751 upvotes
Ottawa
sw6lee wrote:
Jan 20th, 2018 5:40 pm
I understand that moving expense, when moving far enough for a job, are refundable. But is 100% of the cost refundable? Or how many percent of the cost? I spent over $3000 to move between provinces last time. Will I get over 3000 refunded from my income tax? Thanks!
No, not 100%, sorry. It's a deduction from income so the amount you get back will depend on how much income you report. There are requirements to qualify, and not all expenses can be claimed. See
https://www.canada.ca/en/revenue-agency ... enses.html
Newbie
Oct 29, 2013
61 posts
Winnipeg
OttawaGardener wrote:
Jan 20th, 2018 6:09 pm
No, not 100%, sorry. It's a deduction from income so the amount you get back will depend on how much income you report. There are requirements to qualify, and not all expenses can be claimed. See
https://www.canada.ca/en/revenue-agency ... enses.html
Thanks for your answer. I looked at the link, but I can't find how many % of the moving expense will be refunded. When I said 3000, that's just the moving company's charge. The meal, my fuel cost, selling house fee, etc, I didn't count, and I am not expecting a refund for these as I don't have all the documents to prove and I think it's just too much of a headache. But I do have credit card bill to show my ~3000 paid to moving company, just to transport my stuff. I was told when I asked a while ago online that credit card bill would be enough, that is if CRA really asks me for a proof. And also, my employer did not cover it.

It's also worth mentioning that my time at that employer was only until march 2017, and I started a new job right after in the same city. I'm not sure if the moving expense refund will only apply to the income tax I paid for the original employer's job that I had to move to this province for. Or it's for the income tax I paid the whole year 2017 regardless of the employer?

I definitely paid way way more income tax than 3000 for the whole year. Does this mean I'll get all 3000 back when I file tax? Sorry I'm a real noob with things like this.

Thanks.
Jr. Member
Aug 29, 2011
193 posts
146 upvotes
GTA
sw6lee wrote:
Jan 20th, 2018 6:23 pm
Thanks for your answer. I looked at the link, but I can't find how many % of the moving expense will be refunded. When I said 3000, that's just the moving company's charge. The meal, my fuel cost, selling house fee, etc, I didn't count, and I am not expecting a refund for these as I don't have all the documents to prove and I think it's just too much of a headache. But I do have credit card bill to show my ~3000 paid to moving company, just to transport my stuff. I was told when I asked a while ago online that credit card bill would be enough, that is if CRA really asks me for a proof. And also, my employer did not cover it.
Why wouldn’t you claim the cost of selling your house. Real estate commission alone must be hugh. Amounts easily obtained from your lawyer if you have lost your sale documents. Also any refund is going to be based on your tax rate that varies from person to person. So in your example $3000 in moving expenses would return $1200 in a 40% tax bracket.
The Duke
Newbie
Oct 29, 2013
61 posts
Winnipeg
garytheduke wrote:
Jan 20th, 2018 6:40 pm
Why wouldn’t you claim the cost of selling your house. Real estate commission alone must be hugh. Amounts easily obtained from your lawyer if you have lost your sale documents. Also any refund is going to be based on your tax rate that varies from person to person. So in your example $3000 in moving expenses would return $1200 in a 40% tax bracket.
Aha I didnt know about that rule. So you get refund of your tax bracket amount. Thanks for letting me know!

About the real estate commission fee, actually the house wasnt under my name. It was my parents name. But When moving for my job in this province I currently reside, I paid for the moving expense.

I guess there is no seperate real estate commission fee tax refund that my patent can use, right? Its just part of the moving expense tax refund program?

Thanks a lot.

Edit: made it more clear.
Newbie
Mar 15, 2009
81 posts
2 upvotes
Toronto
I am the primary caregiver of my mother who suffers from dementia. However she manages to live alone in her apartment.
Is there any kind of disability/care giver tax credit I can claim on my tax return?
She is on OAS and pays her own rent.
Thanks in advance.

Top