Barrett Tax Law - Blogs

Taxation of a Partnership – The Basics

June 18, 2018 By Vivian Esper Tax Lawyer Barrett Tax Law 1-866-278-8424 416-907-8429 TAXATION OF A PARTNERSHIP - THE BASICS The Canadian common law of all provinces defines a partnership as the relation that subsists between or amongst persons carrying on a business in common with a view of profit. Subsection 102(1) of the Income Tax Act defines a Canadian partnership as a partnership all…

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AON Inc. – Current vs. Capital Expenditures

On September 6, 2017, the Tax Court released its decision of AON Inc. v. Canada 2015-1043 (IT) G ruling on the issue of classification of expenditures (current vs. capital). The Honourable Justice Gaston Jorre confirmed the established legal test used to determine the nature of the expenditures. In summary, Justice Jorre confirmed “enduring benefit” (most recently followed in Rainbow Pipe Line 1999 TCJ No. 604…

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Late Filing Penalties for RRSP Over-Contribution Canceled by Tax Court

On August 31, 2017, the Tax Court of Canada released a judgment Chiang v. The Queen (2016-2715(IT)I where Sommerfeldt J. canceled late filing penalties under section 204.3 and section 162(1) of the ITA.In brief, the appellant, Mr. Chaing, over-contributed to his RRSPs during the period from 2004 through 2013 taxation years. The minister assessed the appellant for the over-contribution and with the late-filing penalties. Sommerfeldt…

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Cryptocurrency Profits in Canada: Capital Gains vs. Business Income

March 12, 2018 By Dale Barrett Managing Partner Barrett Tax Law 1-866-278-8424 416-907-8429 Cryptocurrency Profits in Canada:  Capital Gains vs. Business Income I am asked all the time whether somebody has to pay capital gains tax on their cryptocurrency gains or whether they have to pay business tax.  The answer invariably, is “it depends.” It depends on a number of factors.  There is no set…

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Tax Treatment of Cryptocurrency Theft and Loss

January 13, 2018 By Dale Barrett Managing Partner Barrett Tax Law 1-866-278-8424 416-907-8429 So, after investing in Bitcoin and Ethereum, the North Koreans hacked one of your cryptocurrency exchanges and you lost a Bitcoin after it had hit $20,000 USD (and you bought the Bitcoin for $1.00). Now what? Nobody can help you get it back, and now it's time to deal with the Canada…

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A Canadian First – Battered Women’s Syndrome can help prove Due Diligence

Barrett Tax Law successfully litigated what could be a first in Canada. Using the defence of battered women’s syndrome to show L (shortened for privacy of client) never had the opportunity to file her taxes and exercised due diligence. In the case of R v. L. a woman was charged with five counts of Failure to File under s. 238(1) of the Income Tax Act.…

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Vehicle Expenses

When a vehicle is used for both personal and business purposes, it is necessary to keep a log to record the business use of the vehicle. Please see our article on keeping a vehicle log found here:   Unincorporated Business An unincorporated business may write off (deduct) all reasonable motor vehicle expenses which are on account of the business use of the vehicle. If your…

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Transfers of Property while Having a Tax Debt

Income Tax Act Subsection 160 (http://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-160.html) Excise Tax Act Subsection 325 (http://laws-lois.justice.gc.ca/eng/acts/E-15/section-325.html) Subsection 160 and subsection 325 assessments are the most powerful collection tools that the Canada Revenue Agency (“CRA”) has in their bag. If someone has a tax debt, and that person transfers money, or other property, directly or indirectly to: Their spouse, common-law partner; A person under 18 years of age; or A…

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Transfer Pricing

Income Tax Act Subsection 247 Transfer prices are the prices at which services, tangible property, and intangible property are traded across international borders between related parties. Canada’s transfer pricing legislation requires, for tax purposes, terms and conditions between related parties in their commercial or financial relations to be those that would have been expected had the parties not been related (i.e. acting at arm’s length).…

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Tax Residency

Income Tax Act Subsection 250(1) Canada allows its citizens to be residents of Canada for tax purposes, and non-residents of Canada for tax purposes. This is an important distinction as a non-resident of Canada for tax purposes will only be subject to Canadian taxation on Canadian sourced income. So income from sources outside of Canada is not subject to tax debit here. This is different…

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