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The Department of Finance (“Finance”) previously announced in its 2024 federal budget changes to capital gains, as follows: The capital gains inclusion rate will be increased from 1/2 to 2/3 for capital gains realized on or after June 25, 2024. For an individual at the top marginal tax bracket in Ontario, the first $250,000 of capital gains will be taxed at a combined federal and provincial rate at 26.8% (unchanged). The capital gains beyond the $250,000 threshold will be taxed at 35.7%. The Lifetime Capital gains exemption will be increased to $1,250,000. For Canadian-Controlled Private Corporations (“CCPC”), the effective tax

A limited liability company (LLC) is a very common legal structure in the U.S. through which many U.S. businesses and real estate ventures choose to operate. The income of an LLC flows through to its owner(s) and it offers liability protection similar to a corporation. For U.S. tax purposes, if an LLC has only one owner, it is considered a “single-member” and a “disregarded entity”; in this case, there is no requirement for a separate tax return and the income/loss of the LLC is reported by the owner directly (for example, on the personal tax return if owned by an

Canada’s Deputy Prime Minister and Finance Minister, Chrystia Freeland, unveiled the country’s 2024 federal budget on April 16, 2024. This budget centers around critical tax measures, reflecting a significant shift in fiscal policy. Key highlights include proposed adjustments to capital gains taxation, enhancements to the affordability of housing, and initiatives aimed at promoting a clean economy. The tax measures outlined in Canada’s 2024 federal budget will have significant implications for both businesses and individuals. We have summarized our observations as detailed below. Changes to Capital Gains Inclusion Rate The capital gains inclusion rate will be increased from 1/2 to 2/3 for capital

In recent years, Canadians have been bullish on the real estate market south of the border. Whether U.S. property is purchased for rental or strictly personal use, investors should carefully consider how the property is purchased and understand their ongoing tax obligations. This article will discuss some of the key issues that Canadian investors should be aware of when purchasing property in the U.S. U.S. Estate Tax Unlike the Canadian tax system, the U.S. tax system levies an estate tax on assets owned upon death. For U.S. noncitizens, this applies only to U.S. property. By default, the estate tax rate

The government introduced a national, annual 1% tax on the value of non-resident, non-Canadian owned residential real estate that is considered to be vacant or underused. This Underused Housing Tax (UHT) came into effect on January 1, 2022. The CRA previously announced transitional relief with the waiver of penalties and interest for late-filed 2022 returns, initially to October 31, 2023, and subsequently to April 30, 2024. For returns pertaining to 2023 and subsequent taxation years, the April 30 deadline still applies. There is a new Form UHT-2900 for the 2023 calendar year which is different than the form for the

Welcome to tax season! It’s time to prepare for filing your 2023 tax return. To help you get organized, we’ve put together a checklist to gather all the necessary information. The checklist along with a template to report your rental income and business income, if applicable, is located at the bottom of this article for download. In this article, we would also like to remind you the key deadlines related to your filing obligation and highlight some of new tax changes for 2023. KEY DEADLINES Tax Filing Deadline for Individuals: April 30, 2024 Payment Deadline for Individuals: Any balance owing

In 2022, the Vacant Home Tax (the “VHT”) went into force to levy tax on residential properties in Toronto that are considered vacant. The newly implemented VHT also requires the Toronto homeowners to declare occupancy status of their property every year. We would like to remind all Toronto homeowners that the deadline to declare the 2023 occupancy status of their residential property is February 29, 2024.  Failure to declare may result in automatic assessment of VHT. What is VHT? VHT is applicable to all residential homes in Toronto that are underused or not used as the owner’s principal residence. Properties

In December 2022, legislative amendments brought significant changes to the reporting obligations for certain express trusts in Canada. The rules determining the requirement for trusts to submit an annual T3 Trust Income Tax and Information Return (“T3 Return“) have been revised for trusts with a taxation year after December 30, 2023. In particular, bare trusts, which were previously exempt from filing obligations, may now be required to file an annual T3 Return, unless certain conditions are met. As part of the T3 Return, all trusts are obligated to report additional information such as settlors, trustees, and beneficiaries on an annual

If you have a prescribed rate loan as an income-splitting arrangement, with either a family member or with a family trust, the deadline to repay the 2023 interest on the loan is January 30, 2024. It is vital that the interest is paid in cash as failure to do so would cause the loss of the exemption from the attribution rules for not only that year, but all subsequent years. Given the increase in the prescribed rate to 6% as of 2024 Q1, individuals that were able to ‘lock-in’ a low prescribed rate need to preserve the tax beneficial arrangement

The CEBA loan repayment deadline of January 18, 2024 is fast approaching. All businesses that took advantage of the funding, which included a forgivable portion of up to $20,000 of the loan, should budget accordingly to repay the loan. Failure to repay the loan by the deadline will result in forgoing the forgivable portion. Loan Forgiveness and Extended Deadline Repaying the balance of the loan on or before January 18, 2024 will result in loan forgiveness of up to $20,000. The deadline is extended to March 28, 2024 if a refinancing application is submitted prior to January 18, 2024 at