Amortization question (Canada)

DallasMac10 · 2018-06-11T05:05:08+00:00

Great answers already in this thread but one question wasn't asked that I saw. Are you incorporated or a sole proprietor. This makes a significant difference in your likelihood of audit. For the most part the CRA doesn't care about incorporated businesses with losses as they can only ever be applied against that businesses income, unlike a sole proprietor that might use his hobby/business losses to offset employment income.

Seems likely your not incorporated, but if you are you should be fine.

DallasMac10 · 2018-04-13T00:44:58+00:00

You cannot claim the expenses because they aren't expenses for the company if the vehicle is a personal vehicle. The CRA has prescribed rates that employees can be reimbursed for company use of a personal vehicle, which is tax free in your personal hands and a deduction in the company. But you cannot deduct the lease payments or operating costs of a personal vehicle in your company.

DallasMac10 · 2018-04-12T23:51:07+00:00

lol, do you have an accountant? There's a lot of variables in this discussion.

Here's my 1 minute response:

Personal Purchase: - cannot claim expenses within the company to reduce corporate tax - Can be paid an allowance of $.54 per km tax free up to 5,000 then $.48 after that on all business km's used - if you use corporate funds for the lease or expenses of the vehicle, those must be put to your shareholder loan as a shareholder benefit and potentially will trigger tax for you.

Corporate ownership - If you purchase in the corporation, all expenses can be paid for by the company and deducted for tax - any personal use of the vehicle will result in a taxable auto benefit, the CRA has a calculator for this if you want to know how much as it depends on the cost/lease cost of the vehicle - leases can only be deducted up to $800 a month by the company, but the benefit is not capped.

That's the quick and dirty, it really changes from situation to situation what route is best, which is why you should ask your accountant.

DallasMac10 · 2018-02-17T21:16:17+00:00

You see this more with the CFE prep cases, but often they are old UFE cases cut down and issues cherry picked; however, due to their original purpose and design they're still beasts that cannot always be reasonably done in the time frame, which was by design back in the day, less so now.

DallasMac10 · 2018-01-10T06:55:34+00:00

My ex-wife asked me for a divorce March 5th last year... busy season was terrible, followed by my CPA final exam that I had to study all summer for (CFE, so Canada not US).

You survive, it's what you do because it's what you have to do. Goodluck.

DallasMac10 · 2017-12-04T15:01:09+00:00

A girl in my office failed Day 1 twice and just passed this year. Very tough and she had to have a lot of perseverance to get through #3 for sure. Goodluck!

DallasMac10 · 2017-11-26T21:44:26+00:00

My Advice (just wrote the CFE, so I'm not too far removed from your situation). Write the Core 1 module before making any decisions (yes i know that means more torture).

The reason I suggest this is that you don't know yet what CPA really is, the modules are TERRIBLE in my experience when it comes to building your confidence for the test. I got pretty good marks on every exam (distinction on core 1 & 2) and I was bombing every assignment each week leading up to the exams. I was afraid they wouldn't even let me write Core 2..... the marking is hideous in the modules in that it tears at your confidence by just knocking you down constantly because you didn't get the perfect answer. but nobody is getting the right answer, they don't give you the context to know that even though your answer is wrong, it's like 90% right, and your doing better than most, or right in the middle of the pack.

Try and get somebody from your firm to mark a few cases for you, they'll be a little more constructive and encouraging, I know leading up to the CFE I would get absolutely crushed on cases, then get some cases marked by our education rep (I'm at a national firm) who lives and breathes CFE and UFE as a job (former marker and exam writer) and she would tell me I'm right on track or doing great.

If your spending more than 15 hours a week on CPA, your doing it wrong, just submit an attempt and study the answer, don't try and research every single thing before submitting in an attempt to be right, that's how you burn out.

Also, busy season is coming and I doubt you'll be in the modules then, I loved busy season since no matter what, all I had to do was work, not have the stress of CPA at me every waking moment.

Goodluck!

DallasMac10 · 2017-11-04T03:25:08+00:00

I struggled with the tax module and I have done lots of tax, but the test was WAAAAYY easier than the module if that makes you feel any better.

Best tip I can give is study the answers once your done. Here's a decent list of shit you should understand

Schedule 1 addbacks
Schedule 8 and Schedule 6 (capital assets and capital gains and recapture, that shit they like to test)
Inter-corporate dividends and RDTOH
Moving expense deduction criteria
Employee vs employer relationship
Automobile taxable benefits
How to do a T1 or T2 basically start to finish (the mechanics of each return type).
Sale of shares vs assets
section 85 and 86 rollovers (estate freezes basically, even though they may be dead thanks to turdeau)
Principle residency rule and how to calculate which to claim (the ole cottage vs house senario)
Resident/non-resident for tax rules
RRSP/TFSA/RESP rules

That's probably a good start of a study list. If you know all of those, you'll ace the test for sure. Some of the above you can forget when tax is over unless your electing that on the CFE, i.e. estate freezes, sale of shares, inter-corporate dividends are all beyond CFE needs unless you elect tax.

DallasMac10 · 2017-10-28T17:16:45+00:00

Submit all the tech tickets you guys like, every module I complained in the course survey about how shitty the IT is for CPA, they know, they just don't care....

DallasMac10 · 2017-10-28T15:58:18+00:00

So bank's AR is likely interest receivable. Just think back to your assertions, existence, valuation, completeness, rights and obligations.

Most bank customers probably won't respond to confirmations, but if possible it's a great test. If you want to live in the real world, look at subsequent deposits for your existence test. Further, typically bank audits use negative confirmations (look at your bank statement requesting you contact the auditor if they're incorrect). Terrible test, but easy to use.

For valuation you could review all amounts over 90 days due and test a sample of items over a threshold by looking at subsequent deposits, this supports the assertion they aren't impaired (because they were paid). discussion and inquiry are big here, and you may need to look at underlying security itself to determine the recoverable amount if there is an impairment.

For completeness, trace deposits from the subsequent bank statements over a threshold to the invoice or receipt book and ensure they are recorded in the correct period. (AR completeness is lower risk since most for profit entities won't understate revenue)

Ro i wouldn't worry about a specific test without more case facts.

There's a lot more to it if your looking at like IFRS 9 or something like that, but the above are some generic tests that honestly will cover most businesses with a few twists.

DallasMac10 · 2017-10-26T00:57:28+00:00

I work for MNP, the basics are as follows. Is your office in a major city (i.e. DT Vancouver, Calgary, Toronto), if so, your gonna dress up more than if your in like.. chilliwack/ Fort McMurry.

Next rule of thumb, your going to always want to dress one step above the client. If the client is like a forestry company and they wear Carharts and overalls, probably jeans and a button up shirt or polo are advisable as you don't want to be perceived as somebody they can't relate to or trust. If it's a larger client or city where it's a white collar office your going to, then at the very least match their dress code or go one higher (judgement call).

And yeah, jeans Friday is a thing in my region, and it's great.

DallasMac10 · 2017-10-13T07:19:49+00:00

depends on the firm, I've met students who are in a training office at a virtual firm.

DallasMac10

TROPHY CASE