Bradley Jacoby Games Chartered Professional Accountants | Victoria, BC | 250-370-2191

Director’s Liability: Helping Out Family

Being a director of a corporation comes with many responsibilities. Failing to exercise due diligence in ensuring source deductions (such as EI, CPP, and income tax) are properly withheld from wages and remitted to CRA may result in a director’s personal liability for the corporation’s outstanding amount. A June 12, 2018 Tax Court of Canada case examined whether an individual who set up a corporation (along with a bank account) for his brother to operate…

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Retaining Employment Insurance Benefits: Starting Part-Time Work
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Retaining Employment Insurance Benefits: Starting Part-Time Work

As of August 12, 2018, the “Working While on Claim” program became a permanent part of the Employment Insurance (EI) system. Prior to the program, an individual could earn a very low weekly amount, after which the EI benefit would be eroded on a dollar for dollar basis of earnings. Under the new rules, a person who earns income while receiving EI benefits can keep $0.50 of their EI benefits for every dollar earned, up…

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Interest Deductibility: Returns of Capital

In an April 20, 2018 Tax Court of Canada case, at issue was whether the taxpayer could deduct interest incurred in 2013, 2014, and 2015 related to $300,000 borrowed in 2007 to purchase mutual funds. From 2007–2015, the taxpayer received a return of capital* from the funds, totalling $196,850 over the period. The taxpayer used some proceeds to reduce the loan principal, but the majority was used for personal purposes. Taxpayer loses The Court examined…

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Claiming Child, School, and Tutoring Costs

If you work or go to school and need childcare services you may be able to claim those expenses on your tax return. Some of the services are: caregivers providing child care services; day nursery schools and daycare centres; fees for child care services offered through educational institutions; day camps and day sports schools where the primary goal of the camp is to care for children (an institution offering a sports study program is not…

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Reporting a Foreign Property

The CRA has made changes to Form T1135 . It allows taxpayers who held foreign property with a total cost of less than $250,000, throughout the year, to report under a new simplified reporting method rather than providing the detail of each property. If the total foreign property is $250,000 or more, at any time during a year, the current detailed reporting method will continue to apply. For more information, click on: Reporting for the 2015…

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Employer-Sponsored Social Events: After the Party

In an April 9, 2018 French Technical Interpretation, CRA clarified their position on taxable benefits arising from employer-sponsored social events, such as a holiday party or other event. Where the cost of the social event does not exceed $150/person (previously the limit was $100), excluding incidentals such as transportation, taxi fares and accommodations, there would be no taxable benefit to employees. CRA indicated that the cost should be computed per person who attended, and not per person invited. If the cost exceeds $150/person, the entire amount, including the additional cost, is…

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Subsidized Meals: Are They a Taxable Benefit?

Do you have an employee dining room or cafeteria? In a March 21, 2018 Technical Interpretation, CRA stated that they do not consider meals subsidized by the employer to be a taxable benefit provided the employee pays a reasonable charge. This charge should be sufficient to cover the cost of the food, its preparation and service. Where the charge is less than the cost, the difference would be considered a taxable benefit and should be…

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Home Buyers Need to Check Residency of Home Sellers If They Suspect the Seller Is Not Canadian

When Canadians purchase a home, they are required to withhold part of the purchase price should the seller be a non-resident of Canada. A recent Tax Court of Canada decision (Kau v. the Queen [2018 TCC 156]) should serve as a warning to clients and professionals alike, to watch for any red flags that might suggest the seller is not a resident of Canada. As a result of this recent court decision, the home buyer…

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Construction Activities: Reporting Obligations for Subcontractors

A July 17, 2017 Technical Interpretation examined the conditions which would require the filing of a T5018, Statement of Contract Payments. Where a person or partnership primarily derives their business income from construction activities for a reporting period, a T5018 should be filed for any subcontractor payment or credit made relating to goods or services received in the course of construction activities. The reporting period may be a calendar or fiscal year but cannot be…

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US Citizens: Risks of Tax Non-Compliance

Commencing January 1, 2016, the US State Department was able to deny or revoke passports to US citizens having a “seriously delinquent tax debt” or no Social Security Number associated with their passport. A “seriously delinquent tax debt” is one where the taxpayer owed more than $51,000, after January 1, 2018 (indexed going forward), in tax, interest and penalties. An Alert on the IRS website recently noted that commencing January 2018 the IRS will begin…

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