Overview — Establishing Business Deduction Entitlement through Procedural Diligence The case of Bobic v. The King, 2026 TCC 114, serves as a poignant reminder of the critical importance of record-keeping for small business owners in Canada, where the CRA, ultimately made significant concessions, which the Tax Court noted were...
Introduction: Medical Expense Tax Credit Canada’s Medical Expense Tax Credit (METC) is a non-refundable tax credit. The list of eligible and excluded medical expenses published by the Canada Revenue Agency (“CRA”) is constantly being updated, making it a challenge for taxpayers with medical needs to file their personal tax...
Loss carryovers are an important tool that taxpayers can utilize to reduce their taxable income. When taxpayer incurs a loss, they can use the loss to offset income that would otherwise be taxable. The timing and nature of the loss will affect if and how the taxpayer can utilize...
A gift is generally defined as a voluntary and gratuitous transfer of property, without any consideration given in exchange. A personal gift made in Canada may or may not be made on a tax-free basis, depending on the nature of the relationship between parties. A deed of gift can...
Penalties Canada’s tax statutes contain various penalties that seek to curb non-compliance. A gross-negligence penalty aims to punish a taxpayer whose conduct “involves a high degree of negligence tantamount to intentional acting, an indifference as to whether the law is complied with or not”: Venne v R., 84 DTC...
Introduction – Repeated Failure to File Income Tax Penalty Under Canada’s income tax system, taxpayers are required to calculate, report and pay their taxes in accordance with the applicable deadlines. In particular, the deadline to file 2020 taxes is April 30th 2021 for individual taxpayers and June 15th 2021...
Introduction: The Canada Revenue Agency’s Overzealous Use of Gross-Negligence Penalties Gross-negligence penalties aim to punish taxpayers whose conduct “involves a high degree of negligence tantamount to intentional acting, an indifference as to whether the law is complied with or not”: Venne v R., 84 DTC 6247. As such, the amount...
Introduction – Taxation of Testamentary Trusts and Estates A testamentary trust is one that is created as a result of the death of an individual. Under the Canadian income tax system, once an individual dies, all of that individual’s assets are deemed to have been disposed and then reacquired...
The Canada Revenue Agency’s low prescribed rate opens up income splitting opportunities – A Canadian tax lawyer’s tax guidance The Canada Revenue Agency announced 1 percent prescribed rate starting July 1, 2020 The prescribed rate set by the Canada Revenue Agency (CRA) has been 1 percent since July 1,...
Introduction – Tax Search Warrants Canada’s federal Income Tax Act includes provisions that grant the Canada Revenue Agency (the “CRA”) a wide range of powers for administering and enforcing the Act. For instance, section 231.1 grants the CRA the power to tax audit and inspect the books and records...