Shared Flashcard Set


Tax- Personal Tax
Tax- Personal Tax

Additional Accounting Flashcards




Motor vehicle
1) standby charge = 2% *cost of vehicle* (days available/365)
-reduction in standy charge if vechile used greater than 50% for busines and personal use is less than 1667km/month.
-reduction % = personal use km/ 1677*12
redcution standyby charge = reduction % * standby charge
2) operaing cost benefit
-personal km drive*.26
-reduction to operating benefit= 1/2 standby charge used in lieu of .26 prescribed rate
morto vechile allowable lease payments
if car value greater tan 30k, lease payments must be lessor of:
1) actual lease payments
2) prescribed monthly rate (800+taxes per month)
3)annual lease limit (annual pre tax lease cost * 30k) / (85% of greater prescribed limit and manufactures list price)
Employer provided auto tax planning
- consider employee buy car and charge resonable allowance
- consider sale and leases back of car
- keep log to justify business km
- lower standby charge by reducing # of days vechile available for personal use.
- increase business use by visting clients on the way and from work
Home Office expenses
-deduction only permited if workspace is where individual prinicpally performs the business
-home office expense can't exceed the net business income
-undeducted expenses carried forward indefinitely
-can deduct mortage interest, property taxes, utilities, R&M, rent, home insurannce
- can deduct CCA on portion of home used for purposes of work, but will loose principle residence exeption
Moving expenses
-if taxpayer moves to start or relocate business, start new job, or attend FT studies the moving expenses may be deductible
-new residence needs to be 40km away
-deduction limited to income earned at new work location
-moving expenses include:
- traveling costs( including meals en route)
-transport and storage of
-15 days of meals and lodging
-lease cancellation costs of old resident
-selling costs on old resident
-legal and other costs associated with new residence
-up to 5 k of interest, on old resident while vacant pending sale
-cost of revising legal documents
-utility connect and disconnetion fee
Reimbursemnt tax planning for moving
- certain moving expenses that are not deductible may be reimbursed by an employers without giving rise to a tax benefit:
1) house hounting trip
2) charges to connect and install utilities, appliances, and fixtures from old residence and at new residence
3) 50% of any loss in excess of 15k on sale of old resident (100% for <15kloss)
Donation tax credit
- tax credit at 15% on first $200
- 29% on donations over $200
-can carry forward donations (5ys)
medical expenses tax credit
-generally lower income spouse should cliam due to 3% of NIFT rule
-total medical expenses for yourself, spouse, children and subtract lessor of 3% of NIFTP or 2024
Employment taxable benefits
- baord and lodge (unless for work purposes or at remote location)
- rent free and low rent housing
-trips of non business nature
-cash gifts greater than $500
-costs of tools
-forgiveness of debt
-employer paid education costs when primarly for benefit of employee
Non taxable employment benefits
-moving expenses
- transportation to the job site
-uniforms for job
- dicounts at job
- premiums paid under private health services plan
-recreational facitlites at work place
Income Splitting
-Spousal RRSP
-Pension split (must file joint election, must be CND resident, must be married, must be on "eligble pension income")
-if spouse work for company can pay reasonable salary
Attribution rules
-set of rules that prevents individuals from transferring assets between family members with the intention of avoiding taxes
-property income: transfer to spouse/child for less than FV, income and capital gain taxable to YOU not spouse or child,
-capital gains from property transferred to spouse taxable in your hands not spouse
-capitan gain from property transferred to child taxable in CHILDS hands not you
Transfer Property to Non Arms Length
-ITA 73 automatic provision- attribution to tax in hands of transferor rather than transferee
-property would transfer at cost above
-Can elect out of ITA 73 and exchange at FV consideration then
-rental income taxed in hands of spouse
-interest paid by wife deductible
-husdband taxed on capital gain from transfor and interest income earned
-election out of 73 is benefical if husdband is in the higher tax bracket and property value and rental income expected to increase
Prinicple Residence exemption
-home that qualify for PRE:
-only available to years owner a CND residnet
-Foreign properties qualify
- must ordinarlu inhabit the house sometime during the year
-can designate as principal residence and reduce gain on sale
-only one resident can be designated per year by a family unit

gain - PRE = capital gain
PRE= # of years owned designted +1 /# of years owned *gain
Interest deductibility
-expenses incurred for the purpose of gaining or producing income from property are deductible from that income
-interest paid on home mortage on deductible only if used to produce income
planning points-
maintain the conncection between interest paid and funds borrowed to earn income
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