Term
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Definition
deemed taxable benefit if loan amount included in shareholder income year the loan was made. However this would not apply if the entire loan is repaid witin 1 year of end of taxation year
Non taxable if shareholder is an EMPLOYEE and loan for :
- purposes of acquiring a dwelling
- to acquire a motor vehicle used in employement
- loan made to acquire shares in lending or related corporation.
-all of the above must have reasonable repayment terms
-imputed interest benefit will arise depending on the rate charged in any |
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Term
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Definition
| considered taxable benefit |
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Term
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Definition
| to deduct mgmt salaries, they must be ordinary and necessary, reasonable amount, based on services rendered, and appropriatley incurred in the year |
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Term
| managment fees to be deductible must be: |
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Definition
- incurred for purposes of producing income
-reaosnable
-should be provided and fee paid out
-have a written contract |
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Term
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Definition
| -if paid wihtin 180 days of year end can be deducted by employer when declared and does not have to be included in employement income until received |
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Term
| common business expenses deductible |
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Definition
-business auto expenses
-home office
-convention expenses (2 per year)
-forign taxes |
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Term
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Definition
- April 30
- For an individual or partner who has a sole propritorship due June 15 but amounts owing still due on April 30 |
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Term
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Definition
| must be sent by last day of Feruary of following taxation year. |
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Term
| LifeTime Capital Gains exepmtion |
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Definition
Eligble to use 800k if dispose of Qualifying Small Business Corp shares:
- SBC-CCPC with 90% of FV assets used in active CND business
-Held shares for 24 months preceeding disposition
-For last 24 months, at least 50% of the FV assets used in active CND business |
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Term
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Definition
-available to corps that are CCPCs throughout the year
-reduced it taxable capital employed in CND exceeds 10M
-Available on active business income up to 500k
-ABI must be shared among associated corporations |
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Term
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Definition
-carry back 3 years and used against any type of income
-carry forward 20 years
-most taxpayers will first carry back losses to the extent possible considering that there is a refund available right away. |
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Term
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Definition
- carry back 3 years
- carry forward indefintely
-can only be applied against capital gains |
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Term
| DIVIDENDS VS SALARY pay out of a corporation |
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Definition
| want to compate the after tax cash kept by the taxpayer |
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Term
| Paid through dividend steps |
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Definition
-business income = taxable income
-part 1 tax payable = taxable income *corp rate
=amount avialable for dividends (taxable income -taxes payable)
Non eligble dividends reveieved (amount available for dividend)
-gross up by 25%
=taxable dividends
-multiple by tax rate
=tax before tax credit
-less dividend tax credit (=gross up amount * rate (6/11)
=individual taxes
dividends received -individual taxes = after tax cash kept by tax payer |
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Term
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Definition
business income = salary income
salary income * individual tax = tax paid
Salary income - tax paid = after tax cash kept |
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Term
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Definition
| -gross up by 38% --> pay second |
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Term
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Definition
-gross up by 25%, marginal rate highest after dividend tax credit
-pay first
-normal dividends received from regular CCPC's |
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Term
| Replacement Property Tax deferral Provisions (section 44) |
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Definition
- use provision to eliminate or reduce capital gains arising from qualigying disposistion based on replacment property within a specified time period
-taxpayer must maek election
- defer income inclusions until replacment property assest are sold or used
- voluntary dipsosition : only applies to former business relocation and replacment must occur within 12 months after year in which dipsols took place.
Involuntary disposition: replacment must occur wihtin 24 months after year when disposition occured and disposal is considered when isurance receipt is received.
- apply the recapture gain and capital gain agisnt the new UCC to defer the gains |
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