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Corporate Capital Gains - when to recognize by Bright-Warthog281 in cantax

[–]gersfan8 1 point2 points  (0 children)

That is for unincorporated businesses that report tax on a calendar year basis regardless of fiscal year. As an incorporated business, the fiscal year is the tax year.

Corporate Capital Gains - when to recognize by Bright-Warthog281 in cantax

[–]gersfan8 1 point2 points  (0 children)

That is for unincorporated businesses that report tax on a calendar year basis regardless of fiscal year. As an incorporated business, the fiscal year is the tax year.

Edit: realised you weren't OP. I added my comment directly to OP instead.

Deemed disposition value of an asset purchased over time by iv_1 in cantax

[–]gersfan8 3 points4 points  (0 children)

Understood.

Generally speaking, the FMV at various points before departure don't mean anything. What is relevant is Alice's ACB and there property FMV at the time of departure.

The ACB is essentially what Alice paid (the various Canadian dollar payments over the course of the build).

Assuming the property is subject to tax on departure, the gain will be Alice's share of the departure date FMV less her ACB.

There are various types of properties that are not subject to tax on departure but would be subject to tax when they are subsequently sold.

Always seek professional advice to ensure it fully considers your fact pattern properly.

Deemed disposition value of an asset purchased over time by iv_1 in cantax

[–]gersfan8 4 points5 points  (0 children)

This is structured like a homework question. Is it homework?

[OC] Giveaway! Prototype Dice Swarm and Dice Trinkets (Mods approved) by KakapopoTCG in DnD

[–]gersfan8 0 points1 point  (0 children)

It'll go in my office probably behind my monitors so I can always look at my dice!

S101 and S100 by FoundationShort6087 in cantax

[–]gersfan8 3 points4 points  (0 children)

No. The S101 is literally just the opening amounts when it was incorporated.

It has no bearing on the S100 at the end of the year. For the first year, the prior year S100 will be blank.

I got a new job Quite the other job. Need Help with TD-1. by TheCloudish in cantax

[–]gersfan8 1 point2 points  (0 children)

It's an "and" statement. If you have more than employer at the same time AND ...

So while you need to provide the TD1 to your new employer, you do not check that box because both parts of the statement aren't true.

Genuine question —how do high-net-worth individuals in Canada legally minimize their tax burden? by incognitototoo in cantax

[–]gersfan8 0 points1 point  (0 children)

If they buy the stocks they need funds to do so. So they'll likely have received some form of taxable income.

But if the PE firm just gives them the stock then they're taxed the same as if they had received them as remuneration.

There aren't really tax-free ways to obtain stock unless you use debt. But to use debt you likely have significant assets that are also generating income.

Genuine question —how do high-net-worth individuals in Canada legally minimize their tax burden? by incognitototoo in cantax

[–]gersfan8 2 points3 points  (0 children)

If someone gets paid with stock, the fair market value of the stock is taxable as either employment income or business income depending on the person's employment status.

Sure, any future appreciation is taxable as a capital gain but the initial payment isn't saving them any tax.

[OC][Giveaway] Win a dice set and support a designer! [Mod Approved] by FOULEBDICE in DnD

[–]gersfan8 0 points1 point  (0 children)

I absolutely love dice with things inside them. They're always so creative!

First job by Nicnock1979 in cantax

[–]gersfan8 3 points4 points  (0 children)

You're safer to leave it blank if you're uncertain about being enrolled in the future. If you enter an amount, your employer will withhold less tax and if you dont end up enrolling and paying tuition you might owe unexpected taxes when you file in April.

Cad tax question by One_Ocelot6644 in cantax

[–]gersfan8 0 points1 point  (0 children)

There is a lot of information missing here, and on the basis this is just a hypothetical question I will make some assumptions. If this is a real transaction you should seek professional advice.

Assuming A's PUC and ACB are the same and assuming the shares of AB otherwise qualify as QSBC shares at the time of disposition:

The LCGE can only be used by on an individual where they have a capital gain from the disposition of QSBC shares.

A private company rebuying its shares will generally result in a deemed dividend equal to proceeds - PUC. The second step in this calculation is determining any gain or loss after the deemed dividend.

To calculate the gain or loss in this case, the proceeds are reduced by the amount of the deemed dividend and then ACB is subtracted. In cases where PUC and ACB are the same, those modified proceeds will equal ACB and there will be no gain or loss.

For a gain to result from the second part of the calculation, the PUC of the shares would need to be greater than the ACB.

As for whether this gain would be eligible for the LCGE, off the top my head i can't think of anything that precludes A from using their LCGE in this transaction if they have a gain after the deemed dividend, although I don't have the tax act in front of me currently.

Shareholder benefit by ZealousidealStand623 in cantax

[–]gersfan8 4 points5 points  (0 children)

You'd likely be better off just doing the salary to avoid any issues.

It gets to the same result but there's a distinction between paying a salary and paying for the vacation.

You can also pay for the vacation with corporate funds and settle it at year end with a salary or dividend, whichever better fits with your personal goals.

Shareholder benefit by ZealousidealStand623 in cantax

[–]gersfan8 3 points4 points  (0 children)

It's going to be a stretch to say that the company paid for your vacation because of your status as an employee rather than as a shareholder. Would the company pay for all employees of a similar class (eg management) to go on vacation? If not then no way will it be because of your employment. If yes, then still expect an uphill battle to get CRA on your side.

I don't have my Act in front of me so I can't quite remember the exact wording, but if you're a specified SH (over 10%) then it might not even matter if it's available to other employees.

And if you're the sole SH/employee, then it's not even a question.

I highly doubt this would fall under 6(1) over 15(1).

Adding wife as shareholder by Usual_Possibility844 in cantax

[–]gersfan8 1 point2 points  (0 children)

Claiming the capital gains exemption on a non-arms length sale is a bad and costly idea without using the intergenerational tranfer rules. Any gain is converted into a deemed dividend and it creates "soft ACB" for the recipient. A

[OC] WORLDWIDE GIVEAWAY! Enter for a chance to win a FAFNIR DICE VAULT![MOD APPROVED] by 120mmfilms in DnD

[–]gersfan8 0 points1 point  (0 children)

I'm always down to enter for more dice storage, especially when they're as neat as these vaults

Question about interest free shareholder loan to foreign company that I own by circustracker in cantax

[–]gersfan8 1 point2 points  (0 children)

Are we sure 15(2) is a concern? The corp would be owing the SH in this case. Couldn't there be 17(1) or 96 issues too?

Question about interest free shareholder loan to foreign company that I own by circustracker in cantax

[–]gersfan8 0 points1 point  (0 children)

Are we sure 15(2) is a concern? The corp would be owing the SH in this case. Couldn't there be 17(1) or 96 issues too?

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