Buchanan Barry LLP

In June, the new capital gains rules took effect, marking 2024 as a transitional year. Here's what you need to know: 🗓️ Dividing 2024 into Two Periods: Period 1: January 1 – June 24 Capital gains in this period are subject to the old 50% inclusion rate. Period 2: June 25 – December 31 Capital gains in this period are subject to the new 66.67% inclusion rate. Individuals benefit from an annual threshold of $250,000 subject to the 50% inclusion rate, regardless of the period realized. The division of 2024 into these two periods led many to rush and realize gains in Period 1. Now that we are in Period 2, any gains realized will follow the new rules. Keep in mind: 🤯 The new rules are complex and have various transitional guidelines, especially affecting corporations. 📊 Business owners expecting significant gains or losses before the end of 2024 should consult their tax advisor to understand how these changes impact them. Stay informed and plan ahead to navigate these new regulations. For more tax tips like this, email mailbox@buchananbarry.ca to sign up for our monthly newsletter. #CapitalGains #TaxPlanning #FinancialAdvice #CanadianTax #taxes #TaxTips #TaxNews #BuchananBarry

We’re proud to introduce Tammy Dahl, CPA, CA. Tammy graduated from the University of Calgary with a Bachelor of Commerce degree in 1996. She qualified as a chartered accountant in 1999 and completed the CICA In-depth Tax program in 2002. Tammy joined Buchanan Barry LLP in 1996 and the Leadership Group as Partner in 2007. Tammy provides audit and assurance, accounting, tax and advisory services for a wide range of private and non-profit organizations. #TeamSpotlight #BuchananBarry

The Canada Revenue Agency (CRA) is stepping up efforts to recover incorrectly claimed COVID benefits, including CERB, CRB, and CWLB. These benefits relied on taxpayers to self-determine eligibility at the time of claiming, with the CRA reserving the right to review eligibility later. If you’ve claimed any of these benefits, you might have been contacted by the CRA for proof of eligibility or to repay amounts deemed ineligible. Starting in July 2024, the CRA will issue legal warnings to those who haven't responded or cooperated. Legal action will only be taken when there's no cooperation from individuals with the ability to repay the debt. If you’ve received such letters, now is the time to: ✔️ Work with the CRA to establish your eligibility ✔️ Agree on a repayment plan for any over-claimed amounts More details can be found on the CRA’s website. Stay informed and proactive! #TaxUpdate #TaxTips #BuchananBarry

In April, the Federal Budget introduced a significant change: the capital gains inclusion rate increased from 50% to 66.67%, effective June 25, 2024. The proposal includes a provision that capital gains up to $250,000 realized by an individual directly of through a partnership or trust each year will remain subject to a 50% inclusion rate. 📈 What is the Capital Gains Inclusion Rate? The inclusion rate determines the portion of your capital gains that are included in your taxable income. Since 2000, this rate was 50%. Now, if you bought an asset for $100 and sold it for $400, a $300 gain would mean $200 is taxable. Your tax rate depends on your income and province, ranging from 19% to 54.8%. This change also affects capital losses: a $300 loss now offsets $200 in gains. 🇨🇦 Why is This Change Important? Capital gains taxation began in 1972 and has only changed four times since. This recent shift marks a major transformation in the Canadian tax landscape. 🏛️ Current Status Though effective from June 25, 2024, these changes are not yet law. They remain in draft form, awaiting Parliamentary approval. The rules might still change, or they may not be enacted at all. Stay tuned! Regardless of your wealth, these changes could impact your tax strategy. It's crucial to stay informed and consult with a tax professional to navigate these new rules. For more tax tips like this, email mailbox@buchananbarry.ca to sign up for our monthly newsletter. #CapitalGains #CanadianTax #FinancialPlanning #TaxNews #BuchananBarry

Did you know that the Tax-Free Savings Account (TFSA) offers an incredible opportunity to grow your investments tax-free? 🚫 Contribution Limits: For 2024, you can contribute up to $7,000, plus any unused room from previous years. If you were born before 1992 and have never contributed, you can contribute up to $95,000! 📈 Tax-Free Growth: While contributions are not tax-deductible, all investment income and capital gains within your TFSA are tax-free, provided you're not trading so actively as to be considered “carrying on business.” Take advantage of this powerful savings tool to boost your financial future. Consult with a financial advisor to make the most of your TFSA contributions! For more tax tips like this, email mailbox@buchananbarry.ca to sign up for our monthly newsletter. #taxes #TaxTips #TaxNews #TFSA #BuchananBarry

The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) system is complex, with many special rules and exceptions. Here are some lesser-known rules from the Excise Tax Act that could impact your business: 👩⚕️ Health Clinics: Shared revenues between doctors and clinics can be either taxable or exempt based on the arrangement. 💄 Cosmetic Services: Cosmetic-related health services are taxable unless medically necessary. 🔀 Inter-company Charges: Special elections can eliminate GST/HST on cash flow between related companies, with specific conditions. 🏥 Health Services: Only those regulated by at least five provinces or covered by public insurance in two provinces are exempt. 📍 Tax Based on Address: Services are taxed based on the customer’s address, with many exceptions. 🏠 Real Property Sales: Vendors can recover GST/HST through special input tax credits or rebates. These are just a few examples. For full compliance, consult with a GST/HST expert to avoid costly surprises during audits. For more tax tips like this, email mailbox@buchananbarry.ca to sign up for our monthly newsletter. #taxes #TaxTips #GST #HST #BuchananBarry

If you're buying real estate in Canada from a non-resident, there's a critical tax obligation you need to know. Under section 116 of the Income Tax Act, you must withhold 25% of the purchase price and remit it to the CRA unless the vendor provides a “section 116 certificate”. 💰 Withholding Requirement: Must withhold 25% of the purchase price or be liable for the vendor’s capital gains tax. 📃 Section 116 Certificate: Non-residents can apply for this to relieve purchasers from withholding obligations. 🇨🇦 Scope: Includes Canadian real property, shares of corporations tied to Canadian property, and rights under purchase agreements. 👩⚖️ Legal Advice: Your real estate lawyer should ensure compliance. 🗓️ Upcoming Changes: Withholding rate increases to 35% on January 1, 2025. Stay informed to avoid unforeseen tax liabilities. Always consult with your real estate lawyer and tax professional for more information. #RealEstate #TaxObligations #CanadaRealEstate #taxes #TaxTips #BuchananBarry

There are several kinds of income or benefit that are not subject to tax under the Income Tax Act. To the extent you can get any of these, you won’t need to pay tax on the income, or in many cases even report it. Here are some of the kinds of income that are not taxed, based on the provisions of the Income Tax Act, CRA interpretations or court decisions (available on CanLii.org). 🤕 Damages or most compensation for personal injury 🌪️ Disaster relief payments 📺 Television game show prizes 🎁 Gifts ⭐️ and more! For more tax tips like this, email mailbox@buchananbarry.ca to sign up for our monthly newsletter. #taxes #TaxTips #TaxNews #BuchananBarry

Today, we celebrate the beauty, diversity, and spirit of our great nation 🇨🇦 Whether you're spending the day with family and friends, exploring the outdoors, or simply enjoying a moment of reflection, let's celebrate with joy and gratitude. #HappyCanadaDay

Did you know you can claim tax credits for donations to U.S. charities on your Canadian tax return? 🎓 Foreign Universities: Donations to many foreign universities qualify. Check the CRA’s list of qualifying universities – there are 558 U.S. institutions listed! 💸 U.S. Charities & U.S.-Source Income: Donations to U.S. charities generally qualify if you have U.S.-source income. This rule, found in Article XXI, paragraph 6 of the Canada-U.S. tax treaty, allows donations to be claimed up to 3/4 of your U.S. income. The charity must qualify under section 501(c)(3) of the U.S. Internal Revenue Code. 🇨🇦 Canadian Friends Organizations: Some U.S. charities have “Canadian Friends of…” organizations that can issue Canadian tax receipts. Check with the charity or search the CRA website. 📍 Border Commuters: If you commute to the U.S. for work and it's your main income source, you can treat donations to U.S. charities as if they were made to Canadian charities (subsection 118.1(9) of the Income Tax Act). #BuchananBarry #TaxTips #GivingBack