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February 17, 2018

Executor Duties (5 of 5)

25. Obtain clearance certificates from tax authorities. 26. Prepare accounts if they are to be passed by beneficiaries / courts 27. Determine if other duties / taxes are payable. 28. Follow instructions of will, send releases to beneficiaries for signature. 29. After estate settled, make payments to beneficiaries. Make income tax advisements, if any. 30. Close Estate bank account.
February 11, 2018

Executor Duties (4 of 5)

  19. Satisfy specific legacies through sales, auction, etc, of assets 20.Financial: Valuation of assets as basis for the following: probate fee, deemed disposition of capital properties, source of funds for taxable income, cash flow needs, accounting records (if accounting passed), executor’s compensation. 21. Set aside funds or estimated debts, taxes (including capital gains taxes) and executor’s compensation. 22. Arrange for payments of other debts, legacies, etc. These may wait for estate liquidation. 23. Income tax: prepare and file final returns to date of death. Use prior returns as templates. File any missing years. Consider special returns for year of […]
January 21, 2018

Executor Duties (2 of 5)

  7. Have a preliminary discussion with a lawyer; does the will require probate 8.Determine whether an accountant is required. 9.Estimate immediate cash requirements: specific legacies, family living needs, funeral expenses. In general, there should be no disbursements or payouts to beneficiaries until the estate is settled, but there are special expenditures such as the needs of surviving family members. 10. Attend reading of the will by family members. 11. Obtain a list of assets and liabilities. Keep a list of income. 12. Review contents of safety deposit box.  
January 11, 2018

Executor Duties (1 of 5)

There are many possible duties of an Executor. For example, advertising for creditors on a website such as www.securednotice.com. The following is the first part of a list of possible Executor Duties. 1. Make necessary funeral arrangements including payment. It is unlikely that funeral expenses are tax-deductible. 2. Advertise for creditors. Use www.securednotice.com to replace or supplement newspaper ads. 3.Change mailing address, cancel subscriptions, credit cards, disconnect utilities. Pay bills, credit cards, mortgage, etc. 4.Locate and examine last will and testament. 5.Determine names, addresses, phone numbers, birth dates, and government ID numbers of beneficiaries / next of kin. Notify them. […]
December 12, 2017

Year-End Tax Planning

Tax planning for year-end may save you money. Recognize capital losses by selling stock in companies whose stock price has decreased.  A bad stock pick can be sold, and the capital loss reported. It can offset any capital gains. The loss may be carried back three years (i.e. used to reduce taxes on capital gains in those years) or carried forward for twenty. While capital gains are taxed on only 50% of the gain, this capital loss ‘tax-loss selling’ helps even more. Remember the settlement date is the official sale for tax purposes, so initiate your sale by close Dec27. […]
February 23, 2017

Big Changes for Small Business (Part 4 of 4)

On December 15th, 2016, Royal Assent was given to C-29, a budget implementation bill. C-29 means big changes for companies using the Small Business Deduction. Previously, I discussed the Small Business Deduction, who uses it, and what C-29 changed. Here,  I will briefly discuss the effects on small businesses. As always, consult a tax accountant to review your situation and for tax planning.   It used to be the biggest issue was Association: if two companies had 25% or more ownership in common, they were Associated, and had to share the $500,000 Small Business Deduction. Now, Specified Corporate Income goes […]
February 20, 2017

Big Changes for Small Business (Part 3 of 4)

As of December 2016, Bill C-29 is poised to make major changes to Small Business. In previous blogs, I discussed what the Small Business Deduction is, and what companies can use the Small Business Deduction. In this blog I’ll review the changes, and in the next blog I’ll discuss C-29’s impact. As always, talk to a tax accountant to review your particular situation and to get involved in tax planning. There is a new definition of Specified Corporate Income (new Section 125(7) of the Act). If two companies held by related owners do business with each other, that income won’t […]
January 2, 2017

Big Tax Changes for Small Business (Part 2 of 4)

Canada’s Bill C-29 has been passed. There will be big effects for those who use the Small Business Deduction. In my last blog, the Small Business Deduction was defined: basically 17% lower tax rate for the first $500,000 of active business income. In this blog I will discuss what companies can use the Small Business Deduction. In future blogs I will discuss the changes Bill C-29 will make and the outcome for Small Businesses.   The main users of the Small Business Deduction are Canadian-Controlled Private Corporations (CCPCs). Obviously, the name implies the corporations must be ‘controlled’ by Canadians. Majority […]
December 22, 2016

Big Tax Changes for Small Business (1 of 4)

The current Canadian government’s proposed C-29 will surprise a lot of small businesses. There will be big changes to what income is eligible for the Small Business Deduction. To be fair, some taxpayers were pushing the limits of the law. That being said, the government’s solution puts so much of a burden on small business that it threatens use of the Small Business Deduction. Over four blogs, I will explain what the Small Business Deduction is, who is eligible for the Deduction, describe the changes and why they are being made, and the outcome for small business. The Small Business […]
November 27, 2016

How Bartering is Treated by Tax Law

In the normal course of business, bartering occurs. It is important to carefully approach this as the tax laws are strict. Basically, one should include the regular normal income as revenue and the cost of the barter as an expense. For example, let’s say John rents a basement apartment for $600 a month to Stuart. John and Stuart agree to cut the rent by $100 a month for snow removal, and lawn maintenance. It is a net of $500 income for John. The CRA wants to see the $600 and $100 figures in the income and expense areas, respectively. For […]