Barrett Tax Law - Blogs

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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GST/HST Small Supplier

Excise Tax Act s. 148 A small supplier is a supplier whose worldwide annual GST/HST taxable solutions are less than $30,000, or less than $50,000 for public service bodies. The supplies include zero-rated supplies, and includes the supplies of all associates. An important piece to note is that the calculation of annual revenue is not done on a calendar year basis. Rather it is done…

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Small Business Deduction

Income Tax Act subsection 125 The small business deduction is available on active business income for a Canadian Controlled Private Corporation. It provides a reduction in the corporate tax rate up to the federal limit of $500,000. What the above means is if you are earning active business income as a CCPC then your first $500,000 of net income is taxed at a reduced rate.…

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Qualified Small Business Corporation Shares

Income Tax Act Subsection 110.6(1) and 110.6(2.1) In order to claim the lifetime capital gains exemption on a share sale, the shares must meet certain conditions to qualify for the special treatment. If the shares qualify, then the seller would be able to use his or her LCGE, and receive $800,000 tax-free. The rules pertaining to the shares are two-fold. One regarding their ownership, and…

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