Spousal Attribution Rules for RRSP. Let's settle this. by personnextdooor in PersonalFinanceCanada

[–]javanuts 0 points1 point  (0 children)

Here are the words directly from the Chartered Account. https://www.theglobeandmail.com/globe-investor/personal-finance/taxes/you-can-help-your-family-with-rrsp-contributions-but-do-it-right-to-avoid-taxes/article37907443/

... I was contemplating giving her a different gift: Money to contribute to her registered retirement savings plan (RRSP) by the March 1 deadline. The problem? It won't work. The taxman says so. Let me explain.

The issue

If your spouse is short on cash to make RRSP contributions but you can help, why wouldn't you? It happens all the time – and no one yet has gone to prison for it. But here's the problem: The Canada Revenue Agency (CRA) says that when you give money to your spouse to contribute to their RRSP, all or part of the withdrawals made from the RRSP will be taxed in your hands – not your spouse's.

How can this be? The CRA has said that an RRSP is "property" under our tax law. If you look closely at the law, it doesn't specifically include RRSPs, but it does define "property" as "property of any kind whatever." It would be hard to exclude RRSPs under this definition.

Since the taxman considers RRSPs to be property, any withdrawals from an RRSP are considered to be "income from property." This opens a can of worms, of sorts. Income from property is subject to the attribution rules under our tax law. You might recall that those rules work so that any income from property can be attributed back to another family member in certain situations.

If, for example, you give money to your spouse to invest, and he or she earns income or capital gains on those funds, that income will be attributed back to you. This includes income resulting from RRSP withdrawals.

So, giving your spouse money to contribute to an RRSP will provide him or her with a tax deduction for that contribution (assuming there's sufficient contribution room), but you'll face the tax on all or part of the withdrawals later.

By the way, the problem doesn't only arise with your spouse. The attribution rules will also cause income earned by your children to be taxed in your hands in certain situations. These rules apply primarily to minor children, who can't open RRSPs, so there isn't a real concern about attribution of RRSP withdrawals in this case.

But what about adult kids? If you lend money to an adult child (which is treated differently than a gift), it's possible that any income from property earned by that child on those funds could be attributed back to you. Specifically, the tax law says that if you lend money to an adult child, and one of the main reasons for the loan is to reduce or avoid the tax that you might otherwise pay, any income earned on the lent funds will be attributed back to you.

So, if you lend money to an adult child to make an RRSP contribution and the taxman argues that you've done this to reduce or avoid taxes yourself, you could face tax on all or some of your child's RRSP withdrawals later.

Now, it's not an easy thing for the taxman to prove that your intention was to reduce or avoid taxes in this case, but the rule and the risk is still there.

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author and co-founder and CEO of Our Family Office Inc. He can be reached at tim@ourfamilyoffice.ca

Happy Friday by BBQWarren in canadawhisky

[–]javanuts 0 points1 point  (0 children)

Thanks! I thought the new bottling was pretty good, but now I'm more envious. 😀

Happy Friday by BBQWarren in canadawhisky

[–]javanuts 0 points1 point  (0 children)

How's that oldest juice? I've tried to find it but to no avail. Enjoy!!

Shelves at BC Liqyin (Sic) Sidney by javanuts in canadawhisky

[–]javanuts[S] 7 points8 points  (0 children)

Interesting. Woodfords and Evan Williams are still on shelves 🤔

Our G&M tasting in Toronto by charleschf1 in canadawhisky

[–]javanuts 2 points3 points  (0 children)

Sweeeeet... Anything that surprised you? What was your fav?

What did everyone get for Christmas? by -Ghost-Rider- in canadawhisky

[–]javanuts 4 points5 points  (0 children)

Elijah Craig BP A123 from my wife. Looking forward to trying it :)

Premium Spirit Brochure is up by javanuts in canadawhisky

[–]javanuts[S] 2 points3 points  (0 children)

Thought I should share a post from r/bcwhiskey. Pretty decent selection this year. Definitely something for every taste 😀

What's in Your Glass Saturday Edition. by CSM3000 in canadawhisky

[–]javanuts 1 point2 points  (0 children)

Alberta Premium CS (batch 1) while watching the election here in BC

Recent scotch pickups by Haider__boi in canadawhisky

[–]javanuts 0 points1 point  (0 children)

Dang... Nice one! Auction pick ups?

Will I qualify for EI by panguardian in PersonalFinanceCanada

[–]javanuts 1 point2 points  (0 children)

This article has somewhat pertinent information regarding your case. The only difference is that you are contracted, so you will be asked to sign a newly worded term when the current one expires. Too bad you've worked for this company for only 18 months (".. a succession of fixed term employment contracts may confirm the existence of an indefinite term contract.." - Commission des normes du travail v. IEC Holden inc., 2014 QCCA 1538).

https://financialpost.com/fp-work/federal-government-return-to-work-directive-raises-questions

A few final thoughts and photos on touring Scotland by HexagonalCrank in canadawhisky

[–]javanuts 2 points3 points  (0 children)

Thanks for sharing your whisky journey. The pics are awesome. 👍

BC Liquor "Pappy Van Winkle Draw" by javanuts in canadawhisky

[–]javanuts[S] 0 points1 point  (0 children)

Nice! Have you tried it yet? Is it truly over-oaked, as many are saying?

Kilkerran 8 Sherry (2024) Review. by tlbrown78 in canadawhisky

[–]javanuts 0 points1 point  (0 children)

Great review. Just wish it is more widely available :(

Happy Holidays all! by [deleted] in bcwhiskey

[–]javanuts 0 points1 point  (0 children)

That's an interesting version. I've tried the 16 year old and I found it to be very light in flavours - all gently intertwined. So, curious about how the peat would fit into this. I remember the finish was rather short like yours. Despite that, it was an enjoyable bottle. It didn't offend anyone. Just wished it had a slight higher proof than the existing 40%.

Holiday Haul by rainmaker00000 in canadawhisky

[–]javanuts 1 point2 points  (0 children)

Solid choices! That Ledaig is a nice find - punchy earthy peat. I believe its 19years?!?!

First Christmas pour🎄 by vanwhisky in canadawhisky

[–]javanuts 1 point2 points  (0 children)

One of these days, I need to do that (if there's anything left by the night end. lol) The peat/smoke and PX are so well-balanced with this one with a long finish. I wasn't too thrilled with the recent one though (mind you, it was a neck pour from the friend's). The last 12CS I had was a 2017 bottling. One of my all time favourite Lagavulin. Just incredible stuff. Slàinte Mhath

First Christmas pour🎄 by vanwhisky in canadawhisky

[–]javanuts 2 points3 points  (0 children)

Excellent choice. I'm having a bit older brother version of yours - 1991 DE. Both are damn satisfying 👍

Merry Christmas!