Personal Finance

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

  • Last Updated:
  • Jan 27th, 2023 11:03 pm
Jr. Member
Nov 26, 2019
163 posts
111 upvotes
Is the cash back from setting up the investment account (such as TD direct investing offer (300 dollars cash back when you deposit and hold 3000 dollars for a couple of month) or check/saving account (such as tangerine 20% cash back for visa debit transaction) taxable ? If yes, how to report it?
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Jan 11, 2008
7726 posts
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GTA
Thank you for this thread.

In addition to my salaried job, I have some independent contractor income this year. For December, do I claim this on my taxes based on the year the work was done or the year payment was received? (e.g., for my December invoice, all work on that invoice was completed in December 2022, but the invoice was submitted and paid on January 3, 2023.)
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Jr. Member
Aug 2, 2015
112 posts
185 upvotes
Paying off your LOC is not a taxable event. The taxable event is at the source of the income which allows you to pay off the LOC. Assuming your SO was already taxed on her money that she uses to help you pay off your LOC I don't believe there is an issue here or a need to report anything to CRA.
r3ddrag0nx wrote: 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.
Sr. Member
Mar 5, 2007
842 posts
202 upvotes
Toronto
causation wrote: Paying off your LOC is not a taxable event. The taxable event is at the source of the income which allows you to pay off the LOC. Assuming your SO was already taxed on her money that she uses to help you pay off your LOC I don't believe there is an issue here or a need to report anything to CRA.
Think of this: if I take credit, earn investment income from it (real estate, for example) and have someone else repay it for me, then any excess income from the sale of property should be attributed back to the other party. Do I need to avoid this? If so, how?
Jr. Member
Aug 2, 2015
112 posts
185 upvotes
r3ddrag0nx wrote: Think of this: if I take credit, earn investment income from it (real estate, for example) and have someone else repay it for me, then any excess income from the sale of property should be attributed back to the other party. Do I need to avoid this? If so, how?
Ah, you are right, in case of a spouse or kids there are the attribution rules at play. One solution to simplify the paperwork might be for your SO to loan you money at the CRA prescribed rate and then you can pay your LOC with it. It makes sense since the loan prescribed rate should be lower (I believe it is 3%) than your current LOC. Also the paperwork should be simpler than figuring out all the investement income and the portion of the future capital gains.

This part always confuses me since there is no gift tax in Canada, so that a stranger can gift you money without any tax consequences, but not your SO or kids...
Newbie
Jun 11, 2008
74 posts
2 upvotes
I have already maxed out my RRSP for 2022 before the end of December 2022. If I contribute to RRSP in January/Feb 2023, could I claim it for tax year 2023 instead of 2022?
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Mar 10, 2018
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does it matter?
menmyself wrote: I have already maxed out my RRSP for 2022 before the end of December 2022. If I contribute to RRSP in January/Feb 2023, could I claim it for tax year 2023 instead of 2022?
"I have already maxed out my RRSP for 2022" so 2022 is out of question right?

https://www.google.com/search?q=Can+I+u ... =775&dpr=1

Even though you have to record RRSP contributions made during the first 60 days of 2023 on your 2022 taxes, you don't have to apply them as a tax deduction. Instead, you can elect to carry the amount forward to your 2023 tax return — or another future year.Dec 13, 2022
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Sep 19, 2013
2636 posts
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Winnipeg
Hi, for those who have used IBKR non-registered accounts & invest in US stocks, how do you account for exchange rate. If you can outlay the steps, that will be great.

I converted CAD --> USD. Invested in a bunch of stocks, sold them at profit. Cash is still in USD or invested in other stocks.

Option 1 is to use the BoC exchange rate on the day of each transaction. Even though it doesnt reflect reality as I did not actually exchange $$. Problem is I've 100+ trades (stocks, covered calls, etc), so this will take me a few days.
Option 2 is to use the average annual rate. Here is the language from CRA: If you received payments throughout the year, you can convert them to Canadian dollars using the average Bank of Canada rate for the year.

Any experienced folks that can chime in.
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Deal Guru
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Jan 30, 2006
13790 posts
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Vancouver
T4s should be sent out by February 1? And is there a date where CRA is open for sending my return? Thanks
Deal Addict
Nov 13, 2006
1325 posts
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trellaine201 wrote: T4s should be sent out by February 1? And is there a date where CRA is open for sending my return? Thanks
Employers have till Feb 28, e file starts Feb 22
Sr. Member
Sep 29, 2007
735 posts
231 upvotes
Sold condo at a loss (I'm in Alberta lol)....this will generate a terminal loss. How do I determine value of land vs building on the sale? When condo was depreciated to offset rental income, the cost base was determined to be 100% building 0% land at time of purchase. I think in theory every condo owns a portion of the land/common area....however not sure if this is actually looked at by CRA. Obviously if a % ends up being allocated to land, the terminal loss would be lower than otherwise.
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Mar 3, 2018
3051 posts
3430 upvotes
GTA
retireat50 wrote: Sold condo at a loss (I'm in Alberta lol)....this will generate a terminal loss. How do I determine value of land vs building on the sale? When condo was depreciated to offset rental income, the cost base was determined to be 100% building 0% land at time of purchase. I think in theory every condo owns a portion of the land/common area....however not sure if this is actually looked at by CRA. Obviously if a % ends up being allocated to land, the terminal loss would be lower than otherwise.
If you don't want to pay for an appraisal then you will have to come up with a reasonable land/building value yourself. I have seen 90% building, 10% land for condos used many times without being challenged.

That terminal loss forms part of your rental loss for the year using form T776. The rental loss can then be deducted against your other income.
Last edited by DaveTheDude on Jan 20th, 2023 8:29 pm, edited 1 time in total.
Sr. Member
Sep 29, 2007
735 posts
231 upvotes
DaveTheDude wrote: If you don't want to pay for an appraisal then you will have to come up with a reasonable land/building value yourself. I have seen 90% building, 10% land used many times without being challenged.

The terminal loss forms part of your rental loss for the year using form T776. That rental loss can then be deducted against your other income.
Makes sense, 10% seems reasonable. Since purchase in 2013 I depreciated full cost of the building under Class 1 (4% each year)....so in theory I should have set up 90% of that cost at time of purchase, not 100%. I looked and my CCA claimed each year would not have changed because of this....ie it was less than what the 4% would have been as I did not need the full 4% CCA to offset my rental income....so I believe I would not have to restate prior year returns. However my UCC balance is 10% too high as at Dec 31, 2021.

I wonder how I would adjust for that on the T776? Taking 90% of the prior year UCC balance would not be mathematically correct. I would have to take 90% of my purchase cost, then deduct the CCA taken over the years for a revised UCC amount. I don't see anywhere on the T776 UCC schedule for an adjustment like that. Presumably I would need to do a T1Adjustment for the 2021 tax year revising the ending UCC balance. Seems like overkill though....maybe my tax program will allow me to override the opening balance carried forward.
Sr. Member
Sep 29, 2007
735 posts
231 upvotes
DaveTheDude wrote: If you don't want to pay for an appraisal then you will have to come up with a reasonable land/building value yourself. I have seen 90% building, 10% land used many times without being challenged.

The terminal loss forms part of your rental loss for the year using form T776. That rental loss can then be deducted against your other income.
Makes sense, 10% seems reasonable. Since purchase in 2013 I depreciated full cost of the building under Class 1 (4% each year)....so in theory I should have set up 90% of that cost at time of purchase, not 100%. I looked and my CCA claimed each year would not have changed because of this....ie it was less than what the 4% would have been as I did not need the full 4% CCA to offset my rental income....so I believe I would not have to restate prior year returns. However my UCC balance is 10% too high as at Dec 31, 2021.

I wonder how I would adjust for that on the T776? Taking 90% of the prior year UCC balance would not be mathematically correct. I would have to take 90% of my purchase cost, then deduct the CCA taken over the years for a revised UCC amount. I don't see anywhere on the T776 UCC schedule for an adjustment like that. Presumably I would need to do a T1Adjustment for the 2021 tax year revising the ending UCC balance. Seems like overkill though....maybe my tax program will allow me to override the opening balance carried forward.
Deal Addict
Mar 3, 2018
3051 posts
3430 upvotes
GTA
retireat50 wrote: Makes sense, 10% seems reasonable. Since purchase in 2013 I depreciated full cost of the building under Class 1 (4% each year)....so in theory I should have set up 90% of that cost at time of purchase, not 100%. I looked and my CCA claimed each year would not have changed because of this....ie it was less than what the 4% would have been as I did not need the full 4% CCA to offset my rental income....so I believe I would not have to restate prior year returns. However my UCC balance is 10% too high as at Dec 31, 2021.

I wonder how I would adjust for that on the T776? Taking 90% of the prior year UCC balance would not be mathematically correct. I would have to take 90% of my purchase cost, then deduct the CCA taken over the years for a revised UCC amount. I don't see anywhere on the T776 UCC schedule for an adjustment like that. Presumably I would need to do a T1Adjustment for the 2021 tax year revising the ending UCC balance. Seems like overkill though....maybe my tax program will allow me to override the opening balance carried forward.
Technically you should adjustment prior years CCA/UCC amounts to reflect the correct balance. But if it were me I would just adjust the CCA schedule when determining the terminal loss to reflect the correct final balance. Like reducing the cost of additions column or increasing the proceeds of disposition column. Generally CRA is not to concerned about minor timing differences as to when amounts should be claimed if they are otherwise allowable.

Don't forget you will have a capital loss of the 10% land portion using schedule 3.
Sr. Member
Sep 29, 2007
735 posts
231 upvotes
DaveTheDude wrote: Technically you should adjustment prior years CCA/UCC amounts to reflect the correct balance. But if it were me I would just adjust the CCA schedule when determining the terminal loss to reflect the correct final balance. Like reducing the cost of additions column or increasing the proceeds of disposition column. Generally CRA is not to concerned about minor timing differences as to when amounts should be claimed if they are otherwise allowable.

Don't forget you will have a capital loss of the 10% land portion using schedule 3.
Good reminder on the capital loss. I just checked and Ufile allows me to change the opening UCC balance...I think I will go that way and if CRA has some kind of check it is easily explainable and this is the most conservative approach....ie leaving UCC opening balance as is would result in larger refund
Sr. Member
Mar 7, 2008
807 posts
249 upvotes
I am a full time employee. (get T4 from my employer).

I also get paid by doing some small projects from my friends. (I report them as self-employment incoming ).

This holiday, I sent some gift cards (apple store) to my friends. Can I claim them as cost (might be Other Expenses or Advertising) of self-employment incoming to reduce my tax?
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Jr. Member
Feb 12, 2013
128 posts
36 upvotes
Toronto
Had a conversation with friends how should one withdraw money, for how much each year and for how many years from RRSP with minimal taxes paid when retiring at 55?

For example, $300,000 in RRSP when retiring, total other income $5000 yearly. My take would be to withdraw yearly non taxable income amount minus $5000 yearly income until RRSP is exhausted to pay zero tax. My friends had different views on this.

Any experts here can share your knowledge. Thanks!

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