Sunil and Nita LLP, Chartered Professional Accountants, is a full service accounting firm providing personal/corporate tax, accounting, business advisory and bookkeeping services. We are a trusted name. Our strength is accurate work and building long-term relationships. We take time to know you and your business. We customize solutions to meet your business needs. Our goal is to take care of all your accounting and tax matters so that you have full attention to grow your business. We are affordable and accessible whenever you need us.
As Chartered Professional Accountants, we go beyond analyzing just numbers. We find opportunities behind them for your business. We are not only just another accounting firm, but also a valued business partner. Our “Strengths Behind Numbers ™” business statement guarantees accurate results and higher standard to ethical business practices.
There are accountants everywhere providing same services, then why you should choose us. Here are some reasons:
1. Member of leading Canadian accounting professional association i.e. Chartered Professional Accountants (CPA)
2. Constantly updating the knowledge to bring you best possible solutions
3. No hidden fee or short cut
4. Committed to be available whenever you need us
5. Help you in growing your business by coming alongside as partner at no extra costs
6. Knowledge of information technology (IT) to promote automation resulting costs savings
7. International business experience
8. Affordable Bookkeeping & Tax Planning
9. Experience in dealing with CRA
10. Year round support
11. We will make sure all deductions are included in your tax return
12. Virtual Accountants (ask us how?)
Canadian income tax does not provide definition for ordinary resident or resident. It only states that a person who is an ordinary resident. However, a critical factor in determining residential status is significant residential ties which can be a dwelling place that is available for the individual occupation, a spouse (or common –law partner) or dependent who remain in Canada during an individual absence. Additionally, the courts also have developed some basic principles over the years’ in defining a tax payer residential status. For example, a home owned or maintained by an individual cannot always be the determining factor for residential status in Canada. Social and economic ties are considered an important factor for deciding residential status in Canada.
When you decide to become a Canadian resident, you deemed to have disposed of and re-acquired any property owned immediately prior to establishing residency in Canada at the fair market value of the property at that time. However, this change does not trigger any tax liability in Canada instead fair market value established a new cost base for the property. Certain types of property are excluded though. This is important for tax planning point of view. For example, it would be beneficial in disposing property if the result is a loss to offset gains or income in the country from which you are emigrating.
Individual, Partnership or corporate foreign property, such as shares, bank accounts, and real property with total value (at any time) more than $100,000 must be reported in form T1135. This forms needs to be filed annually by April 30 of the following year which it relates. The penalty for not filling or late filling T1135 is greater of $100, and $25 per day to a maximum of 100 days. Additional penalty will apply if failure to file was done intentionally.
FAPI stands for foreign accrual property income and comes into play when taxpayers own a foreign corporation that is earning passive income. Passive income includes royalties, interest, rent etc. If a taxpayer incorporates a foreign company, and has that company buy a rental property offshore, most people think if they do not repatriate any of the income (i.e. sending money to themselves), the money the company receives is not subject to tax in Canada. This assumption is incorrect. For Example, A foreign corporation, owned by a Canadian resident spends $500,000 on a rental property in the Bahamas. FAPI will now come into play.
If a corporation earns rental income, that income is taxed in your hands personally here in Canada. If the passive (rental) income is being earned in a country that has a tax treaty with Canada, then taxpayers would receive tax credits in the amount already paid in the other country
However, if a foreign corporation's main business is selling and renting homes then income would be considered active income if corporation employs more than five full time employees to earn income. There are separate active income test in order to avoid FAPI. We would be glad to help you if you want to know more about FAPI tax.
If your employer requires you to pay expense to earn employment income then you can deduct most of your employment expense on line 229 of your personal Income tax return. You should maintain a good record keeping of all your expenses. Your employer must complete and sign form T2200 (Declaration of Condition of Employment) which you need to attach with your tax return. Depending upon your circumstances, you may be able to deduct following expenses:
Sometime it is difficult to determine whether rental income from property or from business. The most important factors in determining income source are the number and kinds of services you provide for your tenants. It is property income if you are earning income from property by renting space and providing basic services only which includes heat, light, parking and laundry services. If you provide additional services to tenants such as cleaning, security, and meal then you may be carrying on business. Bottom line is, more services you provide, the greater the chance that the rental operation is a business
You started your business as proprietor and over the year your business has grown. You want to incorporate a company to optimize your tax savings. Section 85 of The Income Tax Act allows you to transfer property (in proprietorship business) to your corporation without any immediate tax impact. This transfer is called “rollover” which allows you to avoid immediate capital gain taxes. For Example, You transfer a capital property to your corporation. The fair market value (FMV) at the time of transfer is $100,000 which you purchased at $25,000. You incorporated a company and received 100 common shares in the corporation and elected to transfer the property at $25,000 (cost) to the corporation. By this section 85 rollover, you will not pay capital gain tax on $75,000 gain (i.e. FMV - $100,000 minus cost $25,000). The corporation’s cost of the property will be $25,000 and the cost of 100 common shares will be $25,000. Please note that 85 rollover is a defferal of capital gain tax rather than complete exemption from tax. For more info, please contact us.
Property can be owned as joint tenancy. On the death of one joint owner, the property held in joint tenancy normally passes by right of survivorship to the surviving owner which is normally not considered part of the estate of the deceased joint owner. In this situation, the property can be transferred without probate and is not subject to probate fees. Please contact us to know more.
Information contained and accessed on this site (the “Site”) provided by the Sunil and Nita LLP is for general guidance and is intended to offer the user general information of interest. The information provided is not intended to replace, serve or substitute for any advisory, tax or other professional advice, consultation or service