Entrepreneurship & Small Business

Taxation - answering any questions here

  • Last Updated:
  • Oct 27th, 2020 8:17 pm
Newbie
Jul 12, 2018
27 posts
PhilipK796978 wrote: for Uber. your income needs to be report as business income in your personal return. your expenses can be claim, they includes gas, maintenance, insuraces etc. Uber provided the mileage record to CRA as well, therefore, CRA can estimate if your expenses are reasonable. for more detail, you should contact an accountant, are you in Ontario, I am.

For purchase of home. Yes, you can take money out from RRSP, and the plan needs to be repaid to your RRSP account annually. no affect to your income tax if you repay, but if you miss payments, it will add to your income for the year. You will also get a first time home buyer credit for personal income tax credit, not the one you mentioned for land transfer tax. you rather can contribute to RRSP or not has nothing to do with the purchase, it depends on the room you have from 2017 assessment. I suggest you contact an account for more detail instead of making a mistake .
Thank you. I would message you
Newbie
Jan 23, 2019
2 posts
hi, i understand golf expenses are generally not allowed as a tax deduction. for my corporation, if i take the office staff out for a golf tournament, will the golf expenses be tax deductible in this case? can i still pay the golf expenses using my corporate funds or will it be considered personal

thanks
[OP]
Member
User avatar
Oct 30, 2017
219 posts
62 upvotes
Ottawa, Ontario
olivedhm wrote: hi, i understand golf expenses are generally not allowed as a tax deduction. for my corporation, if i take the office staff out for a golf tournament, will the golf expenses be tax deductible in this case? can i still pay the golf expenses using my corporate funds or will it be considered personal

thanks
for golf related activities, no. but if you have meals there, then it can be. need to clear show in the receipt
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
Nov 13, 2006
1086 posts
688 upvotes
How should a flipper do his personal tax return, flipper got a house in October 2018 and the house has been empty and will be empty until May 2019 then it will be completely demo'd and sold.

For the 4 months of 2018 there are expenses only (tax, hydro, gas, mortgage interest), with no income and there will never be any rental income.

Is it shown using T776E or T2125. The 2 owners are NOT in the business of buying and selling, they are real estate agents and just saw a good opportunity to make some money.
[OP]
Member
User avatar
Oct 30, 2017
219 posts
62 upvotes
Ottawa, Ontario
asifnana wrote: How should a flipper do his personal tax return, flipper got a house in October 2018 and the house has been empty and will be empty until May 2019 then it will be completely demo'd and sold.

For the 4 months of 2018 there are expenses only (tax, hydro, gas, mortgage interest), with no income and there will never be any rental income.

Is it shown using T776E or T2125. The 2 owners are NOT in the business of buying and selling, they are real estate agents and just saw a good opportunity to make some money.
The way I see, this is a business. T2125. the expenses are business expenses/cost of sale.
thank you very much
Philip Kwok, CPA, CGA
Deal Addict
Nov 13, 2006
1086 posts
688 upvotes
PhilipK796978 wrote: The way I see, this is a business. T2125. the expenses are business expenses/cost of sale.
Where on the T2125 do you show capital gains? I see area for additions and area for disposition, but nothing that calculates capital gains.
[OP]
Member
User avatar
Oct 30, 2017
219 posts
62 upvotes
Ottawa, Ontario
asifnana wrote: Where on the T2125 do you show capital gains? I see area for additions and area for disposition, but nothing that calculates capital gains.
as a flipper, you can't report capital gain. it will be business income.
however, if you are only doing this once or two times, you can still use capital gain. that means, you report in schedule 3, not business income
thank you very much
Philip Kwok, CPA, CGA
Newbie
Sep 15, 2018
37 posts
Hello again,

in 2015 I purchased a company car and paid the full amount of it in cash. So I followed CRA rules for CCA. So I claimed the 1/2 rule for 2015. And the cca amount for 2016 and 2017.

in November 2018, the car was involved in accident and the insurance company paid me on January 8, 2019 for the car, as its total loss.

The value in the CCA book is less than what my insurance paid, so that would be a capital gain, I think.

My taxation year is from April 1 to March 31 every year. which is: (April 1, 2018 to March 31, 2019)

Please help me with the following:

1- I not sure how to record that in Quickbooks?

2- what I should do for the taxation for the year end especially for the cca.? And how much I can claim this year in the cca? for this car? and how to close the book for it?

3- I have purchased another car on December 26, 2018 - how I can claim the new car, do I need claim 1/2 year rule for year 2018?

Thank you again for the great help.
Deal Addict
Nov 13, 2006
1086 posts
688 upvotes
As a ONE TIME flipper, do we just report losses on the T2125 in 2018.... then in 2019 report losses Jan - May 2019 and in 2019 fill out SCH 3....

OR

You think the CRA will allow to just use T2125 in both years and claim any increase as Business Income...
[OP]
Member
User avatar
Oct 30, 2017
219 posts
62 upvotes
Ottawa, Ontario
loudyca wrote: Hello again,

in 2015 I purchased a company car and paid the full amount of it in cash. So I followed CRA rules for CCA. So I claimed the 1/2 rule for 2015. And the cca amount for 2016 and 2017.

in November 2018, the car was involved in accident and the insurance company paid me on January 8, 2019 for the car, as its total loss.

The value in the CCA book is less than what my insurance paid, so that would be a capital gain, I think.

My taxation year is from April 1 to March 31 every year. which is: (April 1, 2018 to March 31, 2019)

Please help me with the following:

1- I not sure how to record that in Quickbooks?

2- what I should do for the taxation for the year end especially for the cca.? And how much I can claim this year in the cca? for this car? and how to close the book for it?

3- I have purchased another car on December 26, 2018 - how I can claim the new car, do I need claim 1/2 year rule for year 2018?

Thank you again for the great help.
1. for quickbook, accident should record at disposal and $$ should be whatever the insurance company paid
2. CCA is only in T2, not in your book, in the book you claim amortization. you don't claim it for the year when the car is disposed.
3. yes, new car can amortize, and 1/2 year rule apply

for all these questions, your current accountant should be able to help you when filing the T2 return, please confirm with them as I am only providing you a very general answer
thank you very much
Philip Kwok, CPA, CGA
Newbie
Sep 15, 2018
37 posts
Hello,

Please can you advise on this

1- in 2015 when I purchased the car for the company, I was advised to not claim the GST in my GST ITC return in that year, and I have to include the GST and the purchase price into one total, and then apply the CCA. is that correct? the cost of the car including the gst was: $28000

Is this how it should be?
Car cost: 28000
Year1 1/2 rule:
Year 2 30 %
.
.
.
etc.

2- This year I bought new car for 43000 (GST included) the limit of CCA is 30,000
How I can do this car in CCA schedule and also in my Quickbooks.

Please help.

Thank you
[OP]
Member
User avatar
Oct 30, 2017
219 posts
62 upvotes
Ottawa, Ontario
loudyca wrote: Hello,

Please can you advise on this

1- in 2015 when I purchased the car for the company, I was advised to not claim the GST in my GST ITC return in that year, and I have to include the GST and the purchase price into one total, and then apply the CCA. is that correct? the cost of the car including the gst was: $28000

Is this how it should be?
Car cost: 28000
Year1 1/2 rule:
Year 2 30 %
.
.
.
etc.

2- This year I bought new car for 43000 (GST included) the limit of CCA is 30,000
How I can do this car in CCA schedule and also in my Quickbooks.

Please help.

Thank you
It is wrong not to claim HST for the car. Unless you don't have a HST account. You loss out of a large refund. Remember, HST is 1 to 1 deductible, claim as expense is only save the tax rate.

For your new car, in your corporation return, record it in the schedule 8 for class 10.1 , 30000. Then claim the HST using the 30000 basis.
For more detail you should contact your professional accountant to make sure it is record rught
thank you very much
Philip Kwok, CPA, CGA
Newbie
Sep 15, 2018
37 posts
Thank you Philip,

I have been advised that for car, I have to depreciate the full amount included the the GST. because I"m in Alberta, so I called CRA and as for advice too, and the lady told me that I can not claim the GST spreatly and I have to depreciate the full amount, as expense and follow the CCA for tax, I wish I recorded her name and conversion.
Please see here:
Screenshot_20190201_100801.jpg
I really do not want to go over and dig and fix the GST for 2015 again, that means the amount of the depreciation will change, and I have to re do all my corporate taxes again for 2015, 2016, 2017 and 2018.

I do not mind at this situation to loss the GST to save myself a big headache.

1- will the method I followed will harm my company and will CRA go after me because I did it wrong? or that is OK.

2- moving forward, and to be clear for the new car and the insurance payment.

A. the insurance paid me 22500 + GST= 23625
Should I claim the GST this year and then record the amount of the disposal

B. For the new car, I paid 40, 850 + Gst: 2150 = total: 43000 for the car. Should I record in QB the full amount and claim the GST, then on the CCA schule start the depression on: $30,000.00

I'm really thankful for your input and help. God bless.
[OP]
Member
User avatar
Oct 30, 2017
219 posts
62 upvotes
Ottawa, Ontario
loudyca wrote: Thank you Philip,

I have been advised that for car, I have to depreciate the full amount included the the GST. because I"m in Alberta, so I called CRA and as for advice too, and the lady told me that I can not claim the GST spreatly and I have to depreciate the full amount, as expense and follow the CCA for tax, I wish I recorded her name and conversion.
Please see here:
Screenshot_20190201_100801.jpg

I really do not want to go over and dig and fix the GST for 2015 again, that means the amount of the depreciation will change, and I have to re do all my corporate taxes again for 2015, 2016, 2017 and 2018.

I do not mind at this situation to loss the GST to save myself a big headache.

1- will the method I followed will harm my company and will CRA go after me because I did it wrong? or that is OK.

2- moving forward, and to be clear for the new car and the insurance payment.

A. the insurance paid me 22500 + GST= 23625
Should I claim the GST this year and then record the amount of the disposal

B. For the new car, I paid 40, 850 + Gst: 2150 = total: 43000 for the car. Should I record in QB the full amount and claim the GST, then on the CCA schule start the depression on: $30,000.00

I'm really thankful for your input and help. God bless.
1. I really don't know. but again, it has been wrong for so many years, really too much work to fix.
2. A for insurance, there is no GST as far as I know, in Ontario, Insurance only has PST. you might want to double check.
B.. for auto, i mentioned earlier, max. at $30000, therefore, for corporate return, can only record $30000, and for HST, can only claim related hst.
for your own bookkeeping, you can record the actual amount.

again, I am not a bookkeeping specialist, I am more a tax personal, so in detail of quickbook, i cannot help you
thank you very much
Philip Kwok, CPA, CGA

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