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

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Jan 27th, 2023 11:03 pm

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Dec 15th, 2022 2:42 pm

#7421

michael2025: Newbie; Dec 14, 2022; 1 posts; Toronto

Dec 15th, 2022 2:42 pm

I incorporated and have two questions about federal corporate accounting (Canada):

1. Capital expenditure: For capital expenditure spent in a house or building in 2022, how many years can be spread for that spending, what is the allowance for each year?
2. Lifetime capital gains exemption: Can the lifetime capital gains exemption be claimed when the corporation is about to close or dissolved? Does this exemption need to be applied ahead of time?

Thanks!

Dec 23rd, 2022 11:53 am

#7422

icedtea365: Member; Jun 6, 2014; 309 posts; 136 upvotes; Toronto, ON

Dec 23rd, 2022 11:53 am

I have a question about making installments for income taxes. So in the past I have had to make some small tax payments at tax filing for income on interest and dividends. Last year with the stock market at a high, I sold some stock and paid 4k in income taxes at filing time. So, from my understanding, if one's net tax owing is more than 3K you need to make installments the following year. Well I never got the letter make installments this year. But I made an installment payment myself of 4k as I know that I will owe again at tax filing since I sold some stock at the beginning of this year.

So my question is for next year: my stocks are currently sitting at a loss due to the current market, but I will hold until they go back up and collect dividends. But if it does go up above my ACB I will sell. How do I pay installments on this for next year? Since I don't know if I will be selling as much depending on where the market goes.

Dec 23rd, 2022 1:10 pm

#7423

adrian2: Deal Addict; Feb 2, 2007; 1036 posts; 1010 upvotes; GTA

Dec 23rd, 2022 1:10 pm

icedtea365 wrote: ↑ I have a question about making installments for income taxes. So in the past I have had to make some small tax payments at tax filing for income on interest and dividends. Last year with the stock market at a high, I sold some stock and paid 4k in income taxes at filing time. So, from my understanding, if one's net tax owing is more than 3K you need to make installments the following year.

You need to pay installments, inter alia, when net tax owing is more than 3K in two of the previous three tax years.

If that's not the case, relax.

CRA is pretty good in sending installment reminder letters when they may be required. If you haven't received one, in the mail or in your Service Canada account, there's nothing to worry about.

+2

Dec 25th, 2022 5:37 pm

#7424

qiyuefeng: Newbie; Dec 4, 2019; 63 posts; 57 upvotes

Dec 25th, 2022 5:37 pm

Hello, I have a question about gifting money to family. I believe it is tax free, but would there be any forms to fill out? It is somewhat of a large number so I don't want to get flagged by the CRA. Thanks!

Dec 25th, 2022 6:27 pm

#7425

Numbersman1941: Member; Aug 23, 2021; 229 posts; 221 upvotes

Dec 25th, 2022 6:27 pm

qiyuefeng wrote: ↑ Hello, I have a question about gifting money to family. I believe it is tax free, but would there be any forms to fill out? It is somewhat of a large number so I don't want to get flagged by the CRA. Thanks!

No gift tax on gifts to adult children. Over the years, I have gifted significant amounts to my adult children. Here is a link for your review: https://www.taxtips.ca/personaltax/when ... axable.htm

+2

Jan 4th, 2023 12:13 pm

#7426

Andrew4Life: Deal Addict; Apr 7, 2011; 1023 posts; 659 upvotes; Toronto

Jan 4th, 2023 12:13 pm

How does capital gain work for properties that were sometimes rental property and sometimes primary residence.

I tried to read up about how one might convert a rental property to a primary residence and something about subsection 43 exemptions but got super confused as it referred to form T2091 which had a bunch of questions about property value in the 1982...

Scenario:
2008, bought a condo. $350k
Lived in it as primary residence from 2008-2012
Moved to a rental appartment in 2013 and rented the condo that was purchased. (Assume condo was $400k)
2023 move back into the condo. (Assume it's worth $700k )
Planning on selling in 2025. (Assuming $600k)

So 2008-2012 Primary Residence
2013-2023 Rental property
2023-2025 Primary Residence

What capital gains are owed at what time and based on what costs......

I saw there were some exemptions but I can't make heads or tails of the process.

Jan 4th, 2023 12:34 pm

#7427

Super_Chicken: Deal Addict; Sep 4, 2005; 3487 posts; 1375 upvotes; Toronto

Jan 4th, 2023 12:34 pm

DiscountDunk wrote: ↑ Hello all,
Was interested in knowing if when selling a stock at a loss within a cash account (non TFSA/RRSP account) can that loss be applied straight to offset income tax paid at tax time or can it only be applied to offset capital gains (either in a real estate sale (rental) or a gain from selling another stock)?
Thanks for your time.

don242 wrote: ↑ Can only be used to offset capital gains.

When selling a stock/ETF in a non-registered account. Normally you need to wait at least 30 days before you buy it again to avoid the superficial loss rule.
Does that rule apply if I re-buy the stock/ETF in a registered account?

e.g., Sold AAPL at a loss in late December 2022 in a non-registered taxable account for the capital loss. Do I need to wait at least 30 days before rebuying AAPL in my TFSA in early January in order to for the capital loss to count?

Jan 4th, 2023 12:41 pm

#7428

Super_Chicken: Deal Addict; Sep 4, 2005; 3487 posts; 1375 upvotes; Toronto

Jan 4th, 2023 12:41 pm

icedtea365 wrote: ↑ I have a question about making installments for income taxes. So in the past I have had to make some small tax payments at tax filing for income on interest and dividends. Last year with the stock market at a high, I sold some stock and paid 4k in income taxes at filing time. So, from my understanding, if one's net tax owing is more than 3K you need to make installments the following year. Well I never got the letter make installments this year. But I made an installment payment myself of 4k as I know that I will owe again at tax filing since I sold some stock at the beginning of this year.

So my question is for next year: my stocks are currently sitting at a loss due to the current market, but I will hold until they go back up and collect dividends. But if it does go up above my ACB I will sell. How do I pay installments on this for next year? Since I don't know if I will be selling as much depending on where the market goes.

If you log into the CRA website, you will see a section on what your options are for installment payments. You will also get a letter so it's obvious that you'll need to make them. If you optionally make them it won't hurt.
Even if you are told to make installments, you're given the option not to pay them.
So if you avoid paying say $4000 and then file your tax return where you net $0 or CRA ows you then there is no issue. If you do not pay the $4000 and you ow them say $4000; then the CRA will charge you an interest payment for not paying the installments.

I'm not sure what the threshold is; e.g., if you don't pay $4000 and ow them $200 will they still hit you with interest??

Jan 4th, 2023 12:42 pm

#7429

Numbersman1941: Member; Aug 23, 2021; 229 posts; 221 upvotes

Jan 4th, 2023 12:42 pm

Super_Chicken wrote: ↑ When selling a stock/ETF in a non-registered account. Normally you need to wait at least 30 days before you buy it again to avoid the superficial loss rule.
Does that rule apply if I re-buy the stock/ETF in a registered account?

e.g., Sold AAPL at a loss in late December 2022 in a non-registered taxable account for the capital loss. Do I need to wait at least 30 days before rebuying AAPL in my TFSA in early January in order to for the capital loss to count?

It definitely does apply and the capital loss will never be available for a deduction. Never buy a a stock in a registered account if it had a capital loss within 30 days.

Jan 4th, 2023 12:44 pm

#7430

redfox2: Jr. Member; Oct 3, 2012; 119 posts; 21 upvotes; Scarborough

Jan 4th, 2023 12:44 pm

I am on mat leave and my parents come help out at my home every week but they return to their own home for breaks every couple of days. My MIL asking if my parents want to claim babysitting income. I tried looking it up but figured easier asking here. Wondering if this has any issues with CRA and will I get affected when I report my income.

Jan 4th, 2023 2:15 pm

#7431

Super_Chicken: Deal Addict; Sep 4, 2005; 3487 posts; 1375 upvotes; Toronto

Jan 4th, 2023 2:15 pm

Numbersman1941 wrote: ↑ It definitely does apply and the capital loss will never be available for a deduction. Never buy a a stock in a registered account if it had a capital loss within 30 days.

Thanks, I'll wait the 30 days then.

Jan 4th, 2023 3:38 pm

#7432

livefreeordie: Jr. Member; Jun 12, 2015; 114 posts; 49 upvotes; Earth

Jan 4th, 2023 3:38 pm

Can someone provide input on how the option premiums are treated for tax purposes? Both on the long and short side? Naked puts, for example.

If you can also link to the source material that would also be appreciated. Thanks.

Jan 15th, 2023 12:22 am

#7433

r3ddrag0nx: Sr. Member; Mar 5, 2007; 842 posts; 202 upvotes; Toronto

Jan 15th, 2023 12:22 am

I have a line of credit I use to strictly invest and I’m currently paying it off. I’d like my significant other (SO) to help pay it off as the interest has become unbearable at these rates. Is this possible? How does this work come tax time? Do I need to do anything special? Track payments and repay my SO?

Fwiw, I pay our household expenses and they save, but again, I’m unable to repay loans and expenses effectively given rising rates.

Any advice would be appreciated.

Jan 15th, 2023 12:06 pm

#7434

mmbilly: Jr. Member; Mar 31, 2013; 153 posts; 52 upvotes

Jan 15th, 2023 12:06 pm

I will be receiving a spousal benefit of social security from my US spouse this year. Do I file a US return with the IRS or do I add it to my Canadian return. I am a Canadian citizen and resident and file taxes in Canada. Thanks in advance.

Jan 15th, 2023 1:43 pm

#7435

tor1deal: Member; May 12, 2014; 225 posts; 85 upvotes; Brampton, ON

Jan 15th, 2023 1:43 pm

Uber driver here. I know how many Kilometers I have driven during Uber drives (through the annual statement which I will receive from Uber).

For the fuel cost, is there any predefined per kilometer mileage rate we can use which is acceptable to CRA (or recommeded by CRA). If yes, whats the per kilometer rate for the year 2022. Thanks.

Jan 15th, 2023 3:18 pm

#7436

don242: Deal Fanatic; Nov 19, 2004; 9139 posts; 2045 upvotes; Cambridge, ON

Jan 15th, 2023 3:18 pm

tor1deal wrote: ↑ Uber driver here. I know how many Kilometers I have driven during Uber drives (through the annual statement which I will receive from Uber).

For the fuel cost, is there any predefined per kilometer mileage rate we can use which is acceptable to CRA (or recommeded by CRA). If yes, whats the per kilometer rate for the year 2022. Thanks.

Nope. You have to keep your actual expenses and prorate them based on the percentage of business use. There is no mileage rate that you can claim.

Jan 16th, 2023 8:18 pm

#7437

Kresher: Member; Jul 2, 2021; 223 posts; 236 upvotes; Vancouver

Jan 16th, 2023 8:18 pm

So, I have a sizeable amount of Tuition Tax Credit from the past when I had to go through training for a commercial license. (T2202)

I have been recently hired at work where they asked me to fill out the TD1 form for payroll.

Should I have put in the Total amount of Tuition Tax Credit, which have accumulated and not been used in the Section 5. Tuition?

I put in $0 because I'm not attending a post-secondary education this year, but it seems like I was mistaken?

Jan 17th, 2023 1:42 am

#7438

ADenariusSaved: Deal Addict; Jan 11, 2020; 3965 posts; 3268 upvotes; Torontois @ 宇宙中心

Jan 17th, 2023 1:42 am

The OP seems gone, but the thread lives on!

Could have used this place in 2019 when Trudeau busted up my HXS swap-based total return fund to avoid taxes...Man that was some paperwork...Can't wait to fire up Genutax again this year! Tax time is my favourite.

HISA ETFs < 5.02% - no CDIC: https://forums.redflagdeals.com/high-in ... no-2574002
Bank ISAs < 4.25%? + CDIC: https://forums.redflagdeals.com/big-6-h ... es-2579841

Jan 17th, 2023 11:44 am

#7439

muscan: Member; Jun 4, 2013; 454 posts; 490 upvotes; GTA

Jan 17th, 2023 11:44 am

Can we claim medical expenses incurred for parents who reside in the United States?

Jan 17th, 2023 1:51 pm

#7440

travelfever: Jr. Member; Feb 12, 2013; 128 posts; 36 upvotes; Toronto

Jan 17th, 2023 1:51 pm

Andrew4Life wrote: ↑
2023 move back into the condo. (Assume it's worth $700k )
Planning on selling in 2025. (Assuming $600k)

2023-2025 Primary Residence
I believe if it is your primary residence and you live there for two years before selling it, you do not pay any capital gain taxes.

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