Flipping / Assigning Properties? Don’t Go To Jail!

CRA Investigating Tax on Undeclared Earnings for Flipping Offers to Purchase Real Estate in Canada

We’ve all heard the stories. In red-hot real estate markets like Toronto and Vancouver, brand-new projects, especially condo projects sell out fast. When sales open, there are lineups around the block. Desperate purchasers clutch serious deposit money in their anxious hands, hoping against hope that by the time they get to the front of the line, there will be a unit left for them to buy. Often, when sales to the public start, a 100 unit project has only 40 units left, the others are already sold. Who got to buy those units and how does that work? Continue reading

Is Your RRSP Mortgage Legal?

Podcast Episode 108:

“RRSP Mortgages and the CRA.”

Registered Retirement Savings Plan (RRSP) mortgages, the supposed Holy Grail of private lending. I hear it all the time. Borrowers of all stripes believe there is a vast pot of money held in RRSP accounts just waiting to be lent to them. And, to some extent, that’s true. There are lots of folks with lots of RRSP money tucked away. Maybe you’ve thought about leveraging your RRSP to become a lender yourself.

But, like everything else run by the government, there are rules to follow if you want to lend your RRSP money as a mortgage.

Download the audio file HERE.
Download the handout HERE.
(control click or right click + save as)

Continue reading

Struck Corporations, Land Titles, and Tax in Alberta

3D stickman with red letter envelope

Podcast Episode 102:
“Corporate Matters Matter.”

Here at RMLO Law LLP in Edmonton, Alberta, we are the corporate registered office for many corporations. We get lots of letters addressed to those corporations because that’s part of being registered office. Anyone who wants to send something official to a corporation can send it to the registered office. Those official notices are often notices of trouble…

A recent letter was no different. It was a scary letter!

Download the audio file HERE.
Download the handout HERE.
(control click or right click + save as)

Continue reading

Non-Resident Taxes

Non-Resident Tax:
A Sleeping Bear with a Big Bite.

As a real estate lawyer, I was happy to have one of my favourite realtors send me a new deal where I would be the seller’s lawyer. The first sign of trouble was a big add-on clause that confirmed the sellers were non-residents of Canada. “Uh-oh, could be trouble,” was my first reaction. Then I thought, “if the contract is making a special note that the sellers are non-residents, maybe they have the non-resident tax thing under control…?” When I chatted with the sellers and asked the question, no such luck. They knew nothing about any Canadian tax they might have to pay as non-residents and, in fact, had done nothing about tax of any kind in the 12 years they had owned the property. Now I’m really concerned and here’s why. Continue reading

Tax Planning Equals Profit

Taxes: A Penny Saved Is a Penny Earned.

Do you own a business or a substantial amount of real estate? Let’s start with a few simple propositions:

  1. You want to pay as little tax as possible both while you are an owner and then when you sell.
  2. Tax rules for Canada are set out in the incredibly complicated Income Tax Act.
  3. Sophisticated, conservative tax planning can reduce your tax substantially.

Continue reading

RRSP Mortgage Guidelines

With an RRSP Mortgage,
Can You Really Have Your Cake & Eat It Too?

Well, there’s still some things to consider about my previous post regarding Jamie Golombek’s column on RRSP mortgages in the National Post. It’s new for the CRA to recognize that interest is deductible in the circumstances as set out in the article, so this bears a bit more analysis. My last kick at the cat is as follows: Continue reading

RRSP Mortgage

You CAN Have Your Cake & Eat It Too, Says The CRA.

Many clients want to use their own RRSPs to help them buy investment property. Previously, it hasn’t worked because you can’t do a ‘non-arm’s length mortgage’. In other words, you can’t lend to yourself. The exception was for a personal residence—but not allowed for an investment property.

 News Flash! According to The National Post’s tax expert Jamie Golombek, a CRA technical interpretation says this can sometimes happen.

Continue reading

Thinking about a Tax Shelter? Think Again!

tax

“If it seems too good to be true…”

is the title of a column by tax expert Jamie Golombek. Jamie’s column is yet another reminder to all of us that the Canada Revenue Agency (CRA) is death on questionable charitable tax shelters.

Essentially, if a tax shelter promoter says you will get a tax receipt for an amount that exceeds your donation, it is likely not a valid tax shelter. Some of these schemes promise deductions of four or five times your donation amount. Normally the CRA isn’t very forthcoming in giving their opinion on any particular tax issue. For tax shelters, however, they are crystal clear. They will audit and disallow not only those bloated deductions, but also your actual donation amount. Then they will pursue for penalties. Continue reading

It’s Just Paperwork, Right?

Podcast Episode 21: “It’s Just Paperwork, Right?”

Not filing your annual tax return with the CRA is serious business. Big fines or potential jail time. Not filing your annual corporate return with corporate registry will, after two years, have your company dissolved. Should you invest in a badly run company?

Download the audio file (Mac control + click + “save as” / PC right click + “save as”) HERE.

The full-text version of this Tale from the Trenches can be found HERE.

Contact Barry McGuire now. Alberta real estate needs an Alberta lawyer.

It’s Just Paperwork, Right? (Handout)

Text Notes for Podcast Episode 21: “It’s Just Paperwork, Right?”

Not filing your annual tax return with the CRA is serious business. Big fines or potential jail time. Not filing your annual corporate return with corporate registry will, after two years, have your company dissolved. Should you invest in a badly run company?

Download the handout (Mac control + click + “save as” / PC right click + “save as”) HERE. Continue reading