[Shareholder in a private company]

Hi Maggie, 

Thanks for your response. I am referring to the tax return in Canada with a partial ownership to a private company located outside of Canada. In this case, does one need to include the partial ownership in his/her Canadian tax return even though there was never any dividend, salary etc. received from the foreign company (ie. merely hold partial share ownership; no financial involvement to the company)

Thanks, 

[Shareholder in a private company]

Was wondering how does one report partial ownership of a private business (located outside of Canada) in personal tax return ? 

There was no any dividend or money received during the whole period while being a shareholder. The company is owned by family member, so names were simply used as one of the shareholders for the private company. There were never any fund received from the company. Only a name was attached as a shareholder. 

How does one go about reporting such "ownership"? 

 

[T1135 form]

Hi,

Was wondering if a foreign bank account needs to be included on T1135 form if it's been opened but has never been used (ie. zero balance on the account since opening).

Thanks,

[Tax resident vs. non-resident]

Hi, 

Was wondering if Canadians can choose to continue filing their annual income taxes (as a regular tax resident) even if they only spend about one month in Canada each year? Reason being not to trigger the deemed disposition (ie. departure tax) ? 

Thanks,

[Partial ownership of foreign property (T1135)]

Hi, 

Was wondering how does one report a "partial ownership" of a foreign property (ie. not referring to joint ownership). I'm referring to transferring a "tax free" amount on a yearly basis to a family member due to gift tax. The family member is a Canadian tax resident. The property is NOT a income producing property. 

In other words, the child who receives the "gift" will have an yearly increment of the foreign property until the full amount of the property is transferred. My question is - does the child need to report the yearly corresponding "gifted amount" (ie. increases yearly) on T1135, or can this be reported once the property has been completely transferred in a few years?

Thanks,

[T1135 foreign brokerage account]

Thanks - what happens if the brokerage account is neither Canada or USA based ? 

Do I then report the brokerage account balance OR list each securities within the account ? 

Thanks again,

[T1135 foreign brokerage account]

Hi,

Was wondering if one needs to include a foreign brokerage account? (total foreign asset is >$250k).

And whether it's the brokerage account itself needs to be reported OR only the investments within the brokerage account needs to be reported? 

Thanks,

[IPOs tax implications]

Hi,

As topic name - was wondering how does one report gains/losses from IPOs from shares? 

Thanks,

[Mutual funds on T1135]

Hello,

CRA site states that Canadian mutual funds (even holding foreign assets) do not need to be included on T1135. My question is - how does one distinguish whether an institution issuing a mutual fund is Canadian or maybe US ?

For eg. Canadian top 5 banks issued mutual funds are definitely Canadian mutual funds, there are some like Fidelity, Pimco, Mackenzie etc. which also issue Canadian and US dollar mutual funds in Canada - how does CRA distinguish which is and not Canadian mutual funds ?

Thanks,

[Bond interests]

2 minutes ago, Curmudgeon said:

That is correct.

Say the interest payment is $12 and the bond was purchased @ $800 two months after the semi-annual interest period began (four months before your first interest receipt). Two-sixths of the $12 is added to the purchase price so the cost to you is $804, which is the ACB. The $4 is the interest that has accrued since the last payment. When the $12 payment is received, only 12 - 4 = $8 is declared as interest.

If the bond had accrued interest, the same calculation applies. All interest accrued on the bond up to the trade date in incorporated into the price and the buyer subtracts it when declaring accrued interest.

Got it, thank you so much ! 👍

[Bond interests]

5 hours ago, Curmudgeon said:

Interest that is payed out is taxed when received. If the interest is accruing and not paid out until maturity, the interest is earned for tax purposes for each 12-month period the bond is owned. If the bond was purchased in the bond market, you paid price plus accrued interest to compensate the seller for the interest accrued since the last payment date. This accrued interest becomes part of the bond's ACB and is deducted from the interest received next year, i.e., it is not considered interest for tax purposes.

Thanks - to clarify a bond that pays interests semi-annually then is only reported as income when received (ie. I do not need to pro-rate the interest as of December 31 for the tax year) correct ? 

In your last sentence - you meant the accrued interest is NOT part of the ACB, and it IS considered as interest income for tax purpose, right? Since I will be removing the accrued interest from capital gain/loss at disposition, while deducting it from the total interest received as income, right ? 

[Bond interests]

Hi,

Was wondering how do one report bond interest income? Is it reported only when it's actually received? Or does it fall under "accrued interest" rule (ie. report partial interest at year end, even though its only receivable in the next tax year) ? 

Thanks,

[Insurance claim payouts]

Hi Brenda, 

Thanks for the clarification. The scale of repair makes sense, as I was thinking the same regarding the extended life of the building with full replaced roof. 

I will also call CRA just to clarify. 

Thanks again for your feedbacks 👍

[Insurance claim payouts]

Hi Brenda, 

Yes - it makes sense a simple replacement would be current expense. But one thing puzzles me is that a roof replacement (even with insurance coverage), the cost can be high, can I really take the full amount less the deductible as current expense? It could easily bring the rental property's net income to be negative.

[Insurance claim payouts]

1 hour ago, BLSM said:

Hi Pete

I think it depends on the breakdown of the payout. 

Was some for loss of rental income?  If so, that amount would be considered rental income.

The deductible is likely a current expense.

Here is an article which may help you some.  https://realestatetaxtips.ca/tax-implications-on-claiming-insurance-on-property-damage/

Brenda

 

Thanks Brenda, 

I was referring to purely repairing a property damage (eg. repairing a roof due to collapse of a tree). In that case, I suppose the insurance would pay for the actual cost to repair the roof LESS any deductible. 

From the article you attached, my understanding then is I can expense the deductible as current expense, while the amount that is paid out by insurance will be added to the cost basis of the property since its a capital cost (ie. new replaced roof)? 

Thanks,

[Land vs. Building for CCA]

1 hour ago, BLSM said:

Hi Pete

Appraisals are pricey, so what I would do to start is, call the property assessment office.

Even if they don't give a breakdown, I'd be surprised if they don't have one in their process.  After all, as the building ages, it drops in value, while the land may go up.

In BC, they do give a breakdown, but I call the assessment office every year to check my land value.  The reason for that is, we have farm status, which dramatically lowers the land value that we are taxed on.  I call, and they give me the actual value for each of our properties.

Brenda

Hi Brenda, 

Thanks a lot for the advice. I will give the municipal office which issues annual property tax bills to find out 👍

[Insurance claim payouts]

Hi,

How does one report an insurance payout as a result of damages on a rental property ?

Normally there will be a deductible amount for the coverage, so does one simply deduct the deductible amount as "expense" and the remaining balance wouldn't need to be reported as there is really no more expense for the damage? 

Thanks, 

[Departure tax]

Hi,

Thanks - yes, I'm aware of T1161 form. But would you by any chance know if CCA recapture occurs during "departure" or would that only kicks in at actual disposition in the future? Because CRA site only mentions capital gain, in it's "departure tax" 

Thanks again,

[Land vs. Building for CCA]

An appraisal at the time of acquisition and at disposal for the building portion of the property ? 

Thanks again,

[Departure tax]

Hi,

I have a rental property outside of Canada and have been claiming CCA on the rental property for some time.

My question is - now I’m planning to emigrate from Canada and will be filing a final tax return with deemed disposition rule. There will be capital gain from the foreign rental property, but what about CCA recapture in this case? Do I also need to include the recapture as part of the final tax return income or can I recapture the CCA in the future when I actually dispose the property? 
 

Thanks,

[Land vs. Building for CCA]

Hi, 

Was wondering how to determine the initial CCA value for a rental value (ie. building portion of the purchase price, excluding land value). Tried looking up the valuation on property tax but Ontario property tax bills doesn't split land and building into separate valuations? Is there a standard proportion being use for residential rental properties? 

Also, at future disposition, I suppose one needs to split the sale proceeds (into land and building), and only take UCC LESS the land portion of the proceeds to find out the recapture amount to be added to that year's income?

Thanks,

 

[CCA additions]

Hi,

I'm trying to add additional CCA to a rental property in 2022. There are a few improvements done. My question is - do I include all improvements as one lump sum and enter one single amount into "Description and amount of capital additions (other than AIIP):" since I don't see an option to separately add different improvement work for 2022. 

Thanks,

[CRA carryover amounts]

Hi,

The CRA carryover amounts is really puzzling me. Hope someone can assist me interpreting it. 

I'm checking to see if I have unused capital loss to use from prior years (through inputting it onto my UFile capital gain/loss history). 

Looking at the CRA carryover table, the top headers are : Year | $ inclusion rate | $ line 127 | $ unapplied net loss | $ net loss applied from prior year | $ net loss applied from subsequent year 

So my question is - the 2021 "$ unapplied net loss" should be the most up to date amount available to deduct any existing capital gains, correct ? 

Also, is it true that the table should balance with the total sum of "$ unapplied net loss" + "$ net loss applied from prior year" equals the total sum of "$ line 127" ? since the total unapplied + applied should balance with the reported capital gain/loss on line 127, right ? (this is the part that puzzles me because my sum does not balance)

Finally, because I had some reassessments from CRA in prior tax years, I need to update my UFile prior years' capital gain/loss, do I only input the figures in $ line 127 ? 

Thank you, 

[Capital gain on rental property]

Hi, 

One question on reporting capital gain on rental property. I have claimed CCA on the property over the years and know about the recuperate rule on CCA.

My question is - how do I report this recuperate CCA on selling the property? Do I need to go back in each and every tax years to see how much I have claimed in CCA to properly add it back to my selling price? 

Thanks.

[CRA carryover amounts]

Hi,

The CRA carryover amounts is really puzzling me. Hope someone can assist me interpreting it. 

I'm checking to see if I have unused capital loss to use from prior years (through inputting it onto my UFile capital gain/loss history). 

Looking at the CRA carryover table, the top headers are : Year | $ inclusion rate | $ line 127 | $ unapplied net loss | $ net loss applied from prior year | $ net loss applied from subsequent year 

So my question is - the 2021 "$ unapplied net loss" should be the most up to date amount available to deduct any existing capital gains, correct ? 

Also, is it true that the table should balance with the total sum of "$ unapplied net loss" + "$ net loss applied from prior year" equals the total sum of "$ line 127" ? since the total unapplied + applied should balance with the reported capital gain/loss on line 127, right ? (this is the part that puzzles me because my sum does not balance)

Finally, because I had some reassessments from CRA in prior tax years, I need to update my UFile prior years' capital gain/loss, do I only input the figures in $ line 127 ? 

Thank you,