TaxBreaks

In our firm’s latest podcast, Kenneth Keung and Kim G C Moody briefly discuss the 2023 Federal Budget proposals to amend the alternative minimum tax regime under Canadian tax law. Specifically, Kenneth and Kim discuss: The history of the AMT; The architecture of the AMT; The 2021 Liberal Party election policy platform promise to introduce a “15% minimum tax; The 2022 Federal Budget update on election policy promise; The 2023 Federal Budget proposals; The release of the draft legislation for the AMT amendments on August 4, 2023; The impact of the AMT proposals on charitable giving, capitals gains and trusts; and What should Canadian taxpayers and their advisors do about these proposals? Happy listening!

In our firm’s latest podcast, Kenneth Keung and Kim G C Moody briefly discuss Canadian COVID era supports and the fact that the Canada Revenue Agency are auditing some of the support claims. Specifically, Kenneth and Kim discuss: A brief and very general history of the larger supports provided during the COVID era.   The fact that the supports were broadly accessible and in many cases fraudulently or inappropriately accessed.   What you should do if the Canada Revenue Agency comes knocking on the door wanting to do an audit. Happy listening!

In our firm’s latest podcast, Kenneth Keung and Kim G C Moody discuss tax issues that need to be considered when non-residents of Canada purchase Canadian real estate. Specifically, Kenneth and Kim discuss: Some recent legislative changes that have impacted the ability of or have consequential impacts such as a ban on foreigners from buying Canadian real estate from January 1, 2023 - December 31, 2024, the Underused Housing Tax Act (and its onerous filing requirements and penalties) and various vacancy taxes in certain municipalities across Canada.   What legal form should be considered when purchasing property in Canada?   If the Canadian property will be rented out, what are some of the tax issues that need to be considered (Part XIII withholding requirements, section 216 reporting)?   If the Canadian property is sold, what are some of the tax, withholding and reporting requirements (section 116 requirements)?   The surprising result when personal-use Canadian real estate property is acquired by a foreigner through a foreign corporation (subsection 15(1) in conjunction with subsection 214(3) resulting in a withholding tax remittance requirement) and the recent comments about this at the STEP Canada CRA RoundTable in June 2023. Happy listening!

In our firm’s latest podcast,  Kenneth Keung and Kim G C Moody discuss the frustrations that Canadian individual taxpayers experience when claiming foreign tax credits.  Specifically, Kenneth and Kim discuss: What are foreign tax credits?  What’s the purpose of them and what are some of the high level eligibility requirements. Using a US citizen resident in Canada as an example, what are some of the common administrative issues that are experienced by such a person in order to claim US taxes paid on their US sourced income as a foreign tax credit on their Canadian tax return? For US taxes paid, what does the Canada Revenue Agency typically require in order to have the foreign tax credits granted for Canadian tax purposes?  Is this an easy process?  Does it take a long time? Some unusual experiences that our firm has recently experienced in trying to protect the rights of our clients to claim the applicable foreign tax credits. The comments by the Canada Revenue Agency recently at the June 2023 STEP Canada Roundtable regarding foreign tax credit claims. Is all of this frustrating experience necessary? Happy listening!

In our firm's latest podcast, Kenneth Keung and Kim G C Moody discuss a topic that has becoming very prevalent in the past few years: Canadians wanting to move to the U.S. for either personal or business reasons (or both). They discuss: The reasons why Canadians are interested in this topic. Important non-tax considerations when planning a move to the U.S. with the most important consideration being immigration planning. Tax considerations such as dealing with the "departure tax", dealing with future dispositions of property when in the U.S. and ensuring your holdings are "cleaned up" to avoid future reporting and tax complications. What will your life look like after you are living in the U.S.? The importance of ensuring your estate planning is revised to consider such an important change. Happy listening!

In our latest episode of TaxBreaks, Kenneth Keung and Kim G C Moody discuss Canadian tax considerations - including recent policy changes - with respect to Canadian residential real estate. Specifically, Kenneth and Kim discuss: The principal residence exemption - is it too generous? Should there and will there be amendments to this generous exemption? The newly implemented "property flipping" rule - is it necessary? The new Underused Housing Tax Act - why was this introduced and a brief discussion of the numerous traps associated with this new legislation; The new "Prohibition on the Purchase of Residential Property by Non-Canadians Act" or the so-called "foreign buyers ban" - is this necessary? A brief discussion about provincial and municipal speculation / vacancy taxes. A lot of the new policy responses are to purportedly respond to the housing shortages that many Canadians are experiencing. However, are such responses more political than grounded in sound public policy? Are they necessary? Join Kenneth and Kim as they have a lively discussion on the above topics.

Join us for a listen as Kenneth Keung, Aasim Hirji and Kim G C Moody have a spirited and wide ranging discussion about the implications of Deans Knight. On May 26, 2023, the Supreme Court of Canada released its landmark decision in Deans Knight Income Corp. v. Canada cited as 2023 SCC 16. The case involved whether the application of the general anti-avoidance rule (“GAAR”) applied to deny a loss-utilization plan by the taxpayer. In light of the Tax Court of Canada’s decision (which decided in favor of the taxpayer) and the subsequent reversal of that decision by the Federal Court of Appeal, the tax community was eagerly awaiting the decision. The majority of the Supreme Court found that the GAAR applied to deny the taxpayer’s loss utilization plan. The Court’s reasonings are interesting and will have wide implications to the taxpayer community especially in light of the government’s recent attempts to “modernize” the GAAR and its release of draft proposals.

In this episode of TaxBreaks, Kenneth Keung and Kim GC Moody provide their predictions on what might be included - or not - in the 2023 Canadian Federal Budget (that will be released on March 28, 2023). Kenneth and Kim provide their best “guesstimates” on: Will personal and/or corporate tax rates increase or decrease? Will the Budget contain the long-awaited Bill C-208 amendments that deal with inter-generational transfers of private businesses? Will the capital gains inclusion rate increase? Will we see amendments to the alternative tax regime? Will we see proposals released for the often-promised employee ownership trusts? Will the principal residence exemption be amended? Will there be new personal tax credits released? Will there be amendments released to clean up the technically deficient Underutilized Housing Tax Act? Will there be legislative proposals released to amend the general anti-avoidance rule? Will there be windfall taxes introduced that attack, say, the oil and gas sector? Will a wealth tax be introduced?  And some other predictions you’ll just have to listen to and find out! Happy listening!

In this episode of TaxBreaks, Kenneth Keung and Kim GC Moody take it back to basic principles for owner-managers of private corporations regarding how they should pay themselves. This basic principle is not so basic and requires a core understanding of tax principles. In addition, the mathematics needs to be run when considering options and alternatives. Kenneth and Kim discuss these core principles for owner-managers to consider.

In this episode of TaxBreaks, Kenneth Keung and Kim GC Moody discuss year-end tax loss selling that is very common towards the end of the calendar year. The objective of tax loss selling is to try to claim losses on non-registered investments against realized capital gains so as to reduce capital gains taxation upon filing of the relevant individual tax returns for the applicable year. But what should you consider? Kenneth and Kim discuss the “30 day rule” known as the superficial loss rule, how to calculate adjusted cost bases, losses that are denied when a “personal-use property” loss is triggered and planning that might be available when transferring property to non-affiliated individuals. Happy listening!

In this latest podcast episode, Kenneth Keung and Kim G C Moody describe the April 7, 2022, Canadian Federal Budget proposal that will introduce a new “Residential Property Flipping” income tax rule. Kenneth and Kim discuss the history and context behind the principal residence exemption, what the new proposals state, proposed exceptions to the new rule and whether or not this new rule is necessary. Happy listening!

The 2018 Canadian Federal Budget introduced proposals that will require certain trusts to disclose significant information about the trust. Later in 2018, draft legislation was introduced to implement such proposals to become applicable for the 2021 taxation year. However, the proposals ended up getting delayed until the 2022 taxation year and the draft legislation was never implemented into law. A revised set of proposals was released on February 4, 2022, with a bombshell that "bare trusts" would now be subject to the new reporting regime. Despite numerous concerns relayed to the Department of Finance about this new requirement, the August 9, 2022, package of amendments released by the Department did not contain any significant changes. Accordingly, practitioners and affected taxpayers will need to be aware of these expanded reporting requirements and get ready now! Happy listening!

As a follow up to their last podcast on the Jackman court case, Kenneth Keung and Kim G C Moody chat about the dangers of owning personal-use assets inside a corporate vehicle.

In this podcast, Kenneth Keung and Kim G C Moody review a recent Tax Court of Canada decision - Bruce Jackman / Nancy Jackman v. HMQ 2022 TCC 73. This case is a rather entertaining case (at least for tax geeks 😂) which dealt with the amount, if any, of the taxable benefit received by the use of a boat owned by a corporation that operated a marina business. Some of the marketing activities involving the boat and the Jackmans might have even been pleasurable and fun! The blunt decision by the Tax Court Judge - who found in favour of the Jackmans - is refreshing and a good reminder of the law on personal use benefits that might be received by shareholders when using corporate assets. Happy listening!

Our firm’s July 5, 2021 podcast described the saga of Bill C-208 (a Canadian private members bill that provides for inter-generational transfers of certain shares of Canadian-controlled private corporations) that received Royal Assent on June 29, 2021 that was accompanied a day later by a very misleading and confusing press release by the Department of Finance that seemed to call into question whether or not Bill C-208 would be respected by the Canadian government as immediate and valid law. Many Canadians and parliamentarians were very confused by the June 30, 2021 press release. The House of Commons Finance Committee Chair convened a special meeting for July 20, 2021 to discuss the June 30, 2021 press release and called Department of Finance officials to address questions. However, on the eve of the committee meeting, the Department of Finance released an additional press release which “affirmed” that Bill C-208 was valid law with immediate effect upon Royal Assent. It also announced its intention to introduce amendments later this year to address “surplus stripping” concerns but acknowledged that any amendments, if passed by Parliament, would only have impact on the later of either November 1, 2021, or the date of publication of the final draft legislation. Accordingly, this podcast discusses the July 19, 2021 Department of Finance press release, the July 20, 2021 House of Commons Finance Committee meeting and what should affected taxpayers do now?

On June 29, 2021, Bill C-208 received Royal Assent. The passing of this private member’s bill was a bit surprising given the rarity of such bills passing. The bill enables inter-generational transfers of certain property to occur with the benefit of the transferor claiming the capital gains deduction—something that could not previously happy under long-standing law. This podcast—hosted by Kim G C Moody, Kenneth Keung and Aasim Hirji of Moodys Tax—walks through the bill and discusses opportunities and areas where the bill may not wholly facilitate its policy objectives. The podcast also provides context and history as to how Bill C-208 came to being proposed and discusses concerns about how the legislation can provide opportunities to be abused. The podcast finishes by discussing the implementation/effective date of the legislation. Is it current law? The Department of Finance stated in a June 30, 2021 news release that it intends to introduce legislation to clarify that these amendments would apply starting January 1, 2022. Can the Department of Finance indeed do that? What is the current law regarding bills that do not have an explicit application date (like Bill C-208)?

On this episode of the podcast, Kenneth Keung and Kim G C Moody go in-depth on a topic they touched on previously in a blog post titled "Tax Planning Arrangement – When Tax Treatment Collides with Accounting Treatment and How This is Like Ferris Bueller’s Day Off ."

Kim G C Moody and Kenneth Keung wrap up the 2020 year with a discussion about prescribed rate loans.

Kim G C Moody and Kenneth Keung discuss the latest federal government subsidy, the Canada Emergency Rent Subsidy (CERS). What is it and why is it necessary? Find out in the latest episode.

Well, it’s not Christmas yet, but it’s never too late to start year-end tax planning for year 2020. In our latest TaxBreaks Podcast, Kim G C Moody and Kenneth Keung discuss a few year-end planning tips for private business owners, such as paying salary versus dividends, and the importance of maximizing contributions to registered plans. Happy year-end planning!