Entrepreneurship & Small Business

# Taxation - answering any questions here

• Last Updated:
• Feb 20th, 2020 5:00 pm
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+7
Oct 7, 2008
1468 posts
GST/HST question can one claim ITCs for goods for resale purchased in the relevant fiscal year but yet to be sold? Say one buys stuff in December (assuming calendar year is your fiscal year) but it only sells the following calendar year.

I ask because the net income in form T2125 does not include your closing inventory (part 3d line 8500), but yet it seems I should be able to claim the ITCs for said inventory in the year they were bought.
Jr. Member
Mar 5, 2018
158 posts
For how long CCA could be claimed?

Hello,

Please, advise for how long I could claim CCA. E.g., If I bought a computer that would be class 50 for \$3,000. In the accounting straight-line depreciation it could be 3 years (\$1,000 per year) with a \$0 residual. For CCA however it would be 1/2 x 55% x \$3,000 for the first year, then 55% for the second one. How many years I have to claim CCA, when should it be ended ? How to write off this?

What CCA would be in the last year?

Thanks

Example:

1st-year:
3000\$ - 825\$ CCA (1/2 of 55%) = 2175\$

2nd-year:
2175\$ - 1196.25\$ (55%) = 978.75\$

3rd-year:
978.75\$ - 538.31\$ (55%) = 440.44\$

Can we stop here and put 440.44\$ as capital lost ?
Nov 17, 2012
2174 posts
Toronto
loudyca wrote: Hello,

in year 2018, I received dividend income from my corporate (I'm the only owner with 100% in my corporate).

Can I split that income with my wife who was in maternity leave and received only T4E from service canada, also she has never worked for my company or has any share.

You need to issue your wife shares in the company so she can earn dividends as well.
[OP]
Jr. Member
Oct 30, 2017
180 posts
Ottawa, Ontario
HI, I am Philip here to answer questions related to small business or personal tax.
thank you very much
Philip Kwok, CPA, CGA
Newbie
May 20, 2019
1 posts
Hello,

I live in Quebec and have been working in cleaning and maintenance subcontracting to other entrepreneurs. In January 2017 I needed to register a GST/QST account as my income would exceed \$30k, but as I have only been subcontracting using my own name and depositing payment to my personal account, I have never registered a business, or associated this GST/QST account with a business. It is registered in my name. My reputation has grown to the point that I am now being asked to quote my own contracts. For reasons of professionalism I would like to register a business and open a business banking account that can accept payments in the business name. My question is, can I use a business name I register along with my existing GST/QST number that is associated with my personal name, or do I now need to register another GST/QST account or modify my current one somehow? I do not want to do anything illegal. I've done research but been unable to find any answers relating to my specific situation. Any help is appreciated!
Jr. Member
Mar 5, 2018
158 posts
If you have registered with Quebec as Sole Proprietorship using your name, you can also choose a company name and use both. As you have already GST/QST associated with your enterprise you can continue to use that. If you haven't yet add a name to your enterprise, you need to modify with Registraire Quebec, just give them a call or email them, they answer quick. A business banking account for a Sole Proprietorship enterprise can accept check paid to your name or your business name.
[OP]
Jr. Member
Oct 30, 2017
180 posts
Ottawa, Ontario
qbodsyt1 wrote: Hello,

I live in Quebec and have been working in cleaning and maintenance subcontracting to other entrepreneurs. In January 2017 I needed to register a GST/QST account as my income would exceed \$30k, but as I have only been subcontracting using my own name and depositing payment to my personal account, I have never registered a business, or associated this GST/QST account with a business. It is registered in my name. My reputation has grown to the point that I am now being asked to quote my own contracts. For reasons of professionalism I would like to register a business and open a business banking account that can accept payments in the business name. My question is, can I use a business name I register along with my existing GST/QST number that is associated with my personal name, or do I now need to register another GST/QST account or modify my current one somehow? I do not want to do anything illegal. I've done research but been unable to find any answers relating to my specific situation. Any help is appreciated!
if you only register a trading name, then no need to change the HST/GST account. it is because this account goes to your sin number, not the name. if in the future, you incorporate a company, then you will need to open a new HST/GST account. as you know, if your revenue goes up, incorporate a company will be able to help you to defer tax.
thank you very much
Philip Kwok, CPA, CGA
Feb 22, 2007
1942 posts
Toronto
Hi Philip,

I have two questions.
1) As a drop shipper do I need to charge HST? Even if it exceeds 30K?
2) My suppliers PayPal account got shut down so I'm taking E-mail money transfers until payment issue gets resolved. It's another drop shipping business as well.
[OP]
Jr. Member
Oct 30, 2017
180 posts
Ottawa, Ontario
realg123 wrote: Hi Philip,

I have two questions.
1) As a drop shipper do I need to charge HST? Even if it exceeds 30K?
2) My suppliers PayPal account got shut down so I'm taking E-mail money transfers until payment issue gets resolved. It's another drop shipping business as well.
Hey
1. Yes, if your customers are in Canada, and if your total sale is more than 30k. depending the provinces, you might charge HST, or GST
2. what is the question?
thank you very much
Philip Kwok, CPA, CGA
Feb 22, 2007
1942 posts
Toronto
PhilipK796978 wrote: Hey
1. Yes, if your customers are in Canada, and if your total sale is more than 30k. depending the provinces, you might charge HST, or GST
2. what is the question?
Thank you for the quick response.
2) Do I have to charge HST.

Sorry Philip just want to confirm. I'm not shipping the item, the supplier is shipping from a different country to customers in Canada. Do I still have to collect HST?
[OP]
Jr. Member
Oct 30, 2017
180 posts
Ottawa, Ontario
realg123 wrote: Thank you for the quick response.
2) Do I have to charge HST.

Sorry Philip just want to confirm. I'm not shipping the item, the supplier is shipping from a different country to customers in Canada. Do I still have to collect HST?
the main issue is, who is your customers? if your customers are in Canada, then yes, it doesn't matter who is doing the shipping
thank you very much
Philip Kwok, CPA, CGA
Feb 22, 2007
1942 posts
Toronto
PhilipK796978 wrote: the main issue is, who is your customers? if your customers are in Canada, then yes, it doesn't matter who is doing the shipping
Thank you Philip
Newbie
Nov 16, 2013
7 posts
Thanks for your willingness to provide this service to the community. What a great resource you are!

We have a family business that is attempting to get restructured. We are open to various methods for tax planning, but we are really unsure of which direction to go. Once restructured there will be 4 shareholders owning equal portions, with the dividends being distributed 3 ways as one of the shareholders is a family unit. We have considered a family trust, and have an insurance broker who's suggesting tax planning while using insurance as a safe place to grow tax-free (deferring it). Where would you suggest we should go to get some sound advice on this? Tax lawyer? Accountant offering tax planning services? Are there any reliable online resources you'd recommend to get more information?

Thanks for taking the time to review.
Jr. Member
Sep 27, 2010
151 posts
Toronto
I have recently started making some money selling my design on Print on Demand websites. I already have a full-time job. At what point should I incorporate for this extra income?

And do I need to do anything extra for my taxes? The sales are world-wide, including Canada. From their website:
We do not issue tax forms to artists on the Redbubble Marketplace.

It’s important to remember that you’re selling your work on Redbubble as an independent artist.

Redbubble is not your employer, nor are you considered a contractor. We don’t pay your income and we don’t take a commission from your sales.
[OP]
Jr. Member
Oct 30, 2017
180 posts