We are pleased to provide a variety of resources on accounting, taxation and other related subjects that we hope will be helpful to both individuals and businesses.
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The content provided in this blog is for general informational purposes only and is not intended as professional accounting, tax, or financial advice. While efforts are made to ensure the accuracy and timeliness of the content, errors or omissions may occur. The content does not constitute a client-advisor relationship. Readers should consult with a Chartered Professional Accountants or other financial professional for advice tailored to their specific needs. We are not liable for any actions one might take based on the information provided in this blog.
This article is timely, with the end of the year in sight.
A Registered Retirement Income Fund (RRIF) is a retirement income vehicle in Canada, designed to provide a steady income stream to retirees by converting savings from a Registered Retirement Savings Plan (RRSP) into taxable income. Here's how it works:
As explained in our previous entry, Section 85 of the Income Tax Act provides a mechanism for taxpayers to transfer certain types of property to a corporation on a tax-deferred basis. It is commonly used for business reorganizations, incorporating sole proprietorships or partnerships, and transferring assets between related corporations while deferring tax on accrued gains.
The Section 85 rollover of capital property in Canada is a provision in the Income Tax Act that allows a taxpayer to transfer certain capital property to a corporation on a tax deferred basis. This means that the transferor (an individual, partnership, or corporation) can defer recognition of any capital gains that would otherwise be triggered by transferring the property. Section 85 rollovers are commonly used in situations like estate freezes, corporate reorganizations, or incorporating a sole proprietorship.
Integration of the corporate income tax system aims to prevent double taxation of corporate earnings. In Canada, this system allows income earned at the corporate level, which is then distributed as dividends to shareholders, to be taxed once at a combined corporate and personal level similar to how personal income would be taxed directly.
When a Tax-Free Savings Account (TFSA) holder passes away, the handling of the account depends on whether the account has a named successor holder or a designated beneficiary. Here’s a breakdown of the main scenarios:
When advances or loans are made to shareholders this should be recorded in a general ledger account set up for this purpose. If a loan is made for which the interest would be tax deductible for the shareholder, it is important to track this loan separately from other advances or loans.
This article is timely, with the end of the year in sight.
A Registered Retirement Income Fund (RRIF) is a retirement income vehicle in Canada, designed to provide a steady income stream to retirees by converting savings from a Registered Retirement Savings Plan (RRSP) into taxable income. Here's how it works:
As explained in our previous entry, Section 85 of the Income Tax Act provides a mechanism for taxpayers to transfer certain types of property to a corporation on a tax-deferred basis. It is commonly used for business reorganizations, incorporating sole proprietorships or partnerships, and transferring assets between related corporations while deferring tax on accrued gains.
When a Tax-Free Savings Account (TFSA) holder passes away, the handling of the account depends on whether the account has a named successor holder or a designated beneficiary. Here’s a breakdown of the main scenarios:
When advances or loans are made to shareholders this should be recorded in a general ledger account set up for this purpose. If a loan is made for which the interest would be tax deductible for the shareholder, it is important to track this loan separately from other advances or loans.
In Canada, capital gains are taxed when you sell an investment or property for more than its purchase price. However, there are several strategies to reduce or avoid capital gains tax. Here’s how you can manage it:
Canada’s Tax-Free First Home Savings Account (FHSA) is a savings tool introduced in 2023 to help Canadians save for their first home. It combines features of both the Tax-Free Savings Account (TFSA) and the Registered Retirement Savings Plan (RRSP), allowing for tax-deductible contributions and tax-free withdrawals when used for a first home purchase.
The 2024 Canadian Budget introduced several changes related to capital gains that are important to be aware of. Here are the key points:
Maintaining good financial management is crucial to a firm’s survival. Timely and informed decisions are much easier when responding to changing conditions in today’s business world.
