Entrepreneurship & Small Business

Taxation - answering any questions here

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Oct 30, 2017
250 posts
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Ottawa, Ontario

Taxation - answering any questions here

Hi, I am a professional accountant in Ottawa, Ontario and I am doing my practice now. I am opening this forum to provide help. If you have any accounting or tax related questions. You can post it here. I am familiar with Ontario tax or Quebec tax system. Thank you
Last edited by Redmask on Sep 17th, 2018 8:05 am, edited 3 times in total.
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thank you very much
Philip Kwok, CPA, CGA
725 replies
Deal Addict
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Feb 14, 2009
1280 posts
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PhilipK796978 wrote: Hi, I am a professional accountant in Ottawa, Ontario and I am doing my practice now. I am opening this forum to provide help. If you have any accounting or tax related questions. You can post it here. I am familiar with Ontario tax or Quebec tax system. Thank you
Good idea!
Newbie
Feb 23, 2008
21 posts
4 upvotes
Toronto
Hi there, on line 101 on HST returns, do we include all global sales or just those that are subject to HST?
Member
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Oct 30, 2017
250 posts
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Ottawa, Ontario
on Line 101, you report all the sales, charge/not charge HST, the sales reported need to match the total income you report in your income statement
Last edited by Redmask on Oct 1st, 2018 9:35 am, edited 1 time in total.
Reason: Removed link
thank you very much
Philip Kwok, CPA, CGA
Newbie
Feb 23, 2008
21 posts
4 upvotes
Toronto
Thanks. One other question. How are HST refunds categorized in accounting system like Xero?
Member
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Oct 30, 2017
250 posts
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Ottawa, Ontario
this is an asset or liability on the balance sheet.
thank you very much
Philip Kwok, CPA, CGA
Newbie
Aug 20, 2018
61 posts
42 upvotes
Kind of an odd question.

How much work is involved in doing a T1 tax return if the corporation had zero financial activity for multiple years?

Basically, the corporation was dormant for five years and I decided to dissolve the corporation. How much should a good accountant charge for multiyear T1 tax return processing for a dormant corporation?
Member
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Oct 30, 2017
250 posts
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Ottawa, Ontario
hey,
a corporate tax return is a T2, not T1.
not including the fees from the accountant, the fees for filing each corporate tax is about $70 per year.
if it is simple, I mean very simple, it will take accountant about 1/2 year year, then I will say the fees can be about $100 per year plus the filing fees, that will be the very minimum I can assume.
which province you are in?
Last edited by Redmask on Oct 1st, 2018 9:35 am, edited 1 time in total.
Reason: Removed link
thank you very much
Philip Kwok, CPA, CGA
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Aug 27, 2004
245 posts
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Where is the governement on Income Sprinkling? It was in the news a while back, lots of protests by Doctors, etc. Now I have not heard much about it recently. Is the Govt. still planning on enforcing against the practice? What are you advising your clients?
Deal Addict
Nov 12, 2014
1170 posts
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Kingston, ON
Mr Sparkle wrote: Where is the governement on Income Sprinkling? It was in the news a while back, lots of protests by Doctors, etc. Now I have not heard much about it recently. Is the Govt. still planning on enforcing against the practice? What are you advising your clients?
Yep it's law now...get advice from your accountant.
Newbie
Aug 20, 2018
61 posts
42 upvotes
PhilipK796978 wrote: hey,
a corporate tax return is a T2, not T1.
not including the fees from the accountant, the fees for filing each corporate tax is about $70 per year.
if it is simple, I mean very simple, it will take accountant about 1/2 year year, then I will say the fees can be about $100 per year plus the filing fees, that will be the very minimum I can assume.
which province you are in?

Thanks for your input. I am in Ontario. Free bump for you.
Last edited by Redmask on Oct 1st, 2018 9:35 am, edited 1 time in total.
Reason: Removed link
Member
User avatar
Oct 30, 2017
250 posts
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Ottawa, Ontario
Mr Sparkle wrote: Where is the governement on Income Sprinkling? It was in the news a while back, lots of protests by Doctors, etc. Now I have not heard much about it recently. Is the Govt. still planning on enforcing against the practice? What are you advising your clients?
it is already applying to everyone. we used to be able to pay dividends out to shareholders without any involved of the company, now we need to make sure they are actively involved before paying any dividends to them
thank you very much
Philip Kwok, CPA, CGA
Member
Jan 25, 2015
396 posts
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Toronto, ON
PhilipK796978 wrote: it is already applying to everyone. we used to be able to pay dividends out to shareholders without any involved of the company, now we need to make sure they are actively involved before paying any dividends to them
By involved they can be share holders/investors and or employees?
Member
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Oct 30, 2017
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Ottawa, Ontario
LoonieDeals wrote: By involved they can be share holders/investors and or employees?
to be involved, it must be employee, part-time or full-time, an employee can be a shareholder also.
thank you very much
Philip Kwok, CPA, CGA
Member
Sep 15, 2018
375 posts
502 upvotes
Edmonton
I have a few questions regarding tax implications of warrants of publicly traded companies on the TSX. A while back I bought warrants for such a company (I am not employed by this company and I bought the shares on the TSX) and I am wondering what are the tax implications of selling the warrants or of converting the warrants to shares at some future time. I bought the shares for $0.15 each and the exercise price is $1.25 each for conversion to shares in the next 2 years or so. Let's say at conversion time the shares are trading at $5.00 and the warrants are trading at $3.75. Now if I sell the warrants (instead of converting them), do I have a capital gains of $3.75 - $0.15 = $3.60 for each warrant? I assume it is a capital gains or is it deemed income for tax purposes? Next scenario is if I convert them instead and pay $1.25 for conversion to shares what happens with the difference between my total cost to acquire the shares ($0.15 + $1.25 = $1.40) and their present value ($5.00)? Am I taxable that year for any capital gains, any income (how much of each?) or am I only taxable the year I end up selling the shares? Lastly, when I end up selling these shares, let's say when their value is $10.00 what are my tax implications (capital gains vs income)? Sorry for the long question but I would like to know all tax implications in helping determine my best route to take. Thanks
Newbie
Sep 15, 2018
48 posts
4 upvotes
Hi, Thank you in advanced for help.
Intro:
I have a small corporation in Alberta, and I'm using Quick Book to do my book keeping and taxtron software to file my income tax.
Our fiscal year ends on March 31 every year, and this is year 3 for me in business, I file the corporate tax every year in September.
I have 2 questions:
1) Recoding the Federal and Provincial tax paid.
How I should record the taxes paid in QB?
What I did the following:
I created a chart account: Canada Revenue Federal Tax – Type: Expenses
So I did the following JE for 2015 year in September 2016
Dr: Canada Revenue Federal Tax
Cr: Bank

The amount showed in my Income statement for the year 2016 tax, and the Tax account said, this should not show in the Income Statement, as this already been calculated for that year in TaxTron, and I need to recorded correctly for that year not after April 1, 2016. Is that true?
I read this post: corporate-tax-question-does-payment-goe ... n-1135648/

And they advised as:
Dr. Income tax expense
Cr. Tax payable.
But in my case I have paid the amount so there is no paypal as its already paid.?
How I should record this amount, under what account? And for what year.

2) In QB all my remaining amounts are in the Bank account, I have ZERO balance in my Retained Earning. Do I need to move what money left in the corporate to this account after filing the tax?
Thank you again,
Jr. Member
May 24, 2006
174 posts
28 upvotes
PhilipK796978 wrote: on Line 101, you report all the sales, charge/not charge HST, the sales reported need to match the total income you report in your income statement
match the total income you report in your income statement? if I choose quick method for GST, line101 will be income+gst, it will still match income statement?
Last edited by Redmask on Oct 1st, 2018 9:36 am, edited 1 time in total.
Reason: Removed link
Member
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Oct 30, 2017
250 posts
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Ottawa, Ontario
Hey, loudyca

in your case, because you didn't record the tax payable in 2015, therefore, you didn't set up the payable, and you can't do "debit tax payable, and credit cash", you will need to record "debit tax expense and credit cash."
it will happen to you every year if you don't record the tax payable before you close your book. therefore, I suggest don't close your book yet until you file your tax return and know how much the tax is.

i don't understand your part 2, need you to be more detail of what you mean
Last edited by Redmask on Oct 1st, 2018 9:36 am, edited 1 time in total.
Reason: Removed link
thank you very much
Philip Kwok, CPA, CGA
Member
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Oct 30, 2017
250 posts
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Ottawa, Ontario
mcron wrote: match the total income you report in your income statement? if I choose quick method for GST, line101 will be income+gst, it will still match income statement?
if you are using Quick Method, reported 101, and revenue from Financial will have a different, and the different is the amount you need to remit.
thank you very much
Philip Kwok, CPA, CGA
Member
User avatar
Oct 30, 2017
250 posts
71 upvotes
Ottawa, Ontario
depending on how often you trade, the gain/loss from the warrants sales can either be capital/business gain/loss.

if you convert to shares and sell the shares, gain/loss also, and the cost is price of warrant, .15 + exercise $1.25.

let's say at conversion time the shares are trading at $5.00 and the warrants are trading at $3.75. Now if I sell the warrants (instead of converting them), do I have a capital gains of $3.75 - $0.15 = $3.60 for each warrant? - Yes

you don't have any gain/loss until you trade it.
Last edited by Redmask on Oct 1st, 2018 9:36 am, edited 1 time in total.
Reason: Removed link
thank you very much
Philip Kwok, CPA, CGA

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