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U.S. Tax Tips
Forms, Forms and More Forms
In this U.S. Tax Tip we are going to look at expanded Form 8858. Form 8858 has grown, over the years, into a comprehensive and complex filing. This U.S. Tax Tip is not meant to be a comprehensive review of Form 8858 nor an in-depth analysis of relevant U.S tax law. A treatise could be written with respect to each. Rather, in light of the expanded January 1, 2018 filing requirement and the lack of specific IRS guidance we wish to highlight some issues that our readers may not be aware of. Unfortunately, as is typical, neither Congress, the United States Treasury nor the Internal Revenue Service consider the impact of these rules (and the associated compliance costs) on U.S. persons who live abroad. A lot of information is required to accurately complete the form and significant penalties may apply for non-compliance.
IRS Extends Personal Filing Deadline
On March 17, 2021, the U.S. Internal Revenue Service (“IRS”) issued IR-2021-59 whereby the U.S. Treasury Department and the Internal Revenue Service announced that they have automatically extended the individual federal income tax filing deadline to May 17th, 2021 from the original due date of April 15, 2021.
What a Start for 2021!
Welcome to the New Year and our first Cadesky U.S. Tax Tip for 2021. Everyone here at Cadesky U.S. Tax hopes that you, and your loved ones, managed to keep safe (as much as possible!). It has certainly been an interesting start for 2021!
On January 5, 2021 the State of Georgia held runoff elections for their two Senate seats. Republican David Purdue and Democrat Raphael Warnock, led the respective popular vote held on November 5, 2020.
Tax Tips
Meeting the April 30 Tax Deadline
As you may know, we have supported a request to the CRA to extend the April 30 deadline to June 15. But if the deadline is NOT extended, here are some practical tips to reduce the burden of a COVID tax season.
New Trust Reporting Requirements Starting 2021
As part of the Canadian government’s efforts to combat money laundering, aggressive tax avoidance and tax evasion activities relating to trusts, enhanced income tax reporting requirements for certain trusts will be required for the 2021 and subsequent taxation years. The new rules also contain harsh penalties for knowingly fail to comply with the new trust reporting requirements or non-compliance due to gross negligence…
CRA Extensions v1.1
On July 27, 2020, the Canada Revenue Agency (the “CRA”) announced a further extension to the tax payment and filing due dates for certain taxes from September 1, 2020 to September 30, 2020. The extension applies to current year individual, corporate, and trust tax returns, as well as instalment payments. Interest will not be charged on these amounts if payments are made by the extended deadline of September 30, 2020. Whether or not full payment is required in order to receive this relief is unclear.
Transfer Pricing Newsletter
Our Tax Books
Taxation of Trusts and Estates: A Practitioner's Guide 2019
Grace Chow, Ian Pryor
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Trusts and International Tax Treaties
Michael Cadesky
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Taxation at Death: A Practitioner's Guide 2016
G. Chow and M. Cadesky
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Towards greater fairness in taxation: A Model Taxpayer Charter
M. Cadesky, I. Hayes, D. Russell
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Taxation of Real Estate in Canada
Michael Cadesky
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In-Depth Articles
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The MLI: Getting Closer
by Henry Shew
Jul 31, 2019
On June 21, 2019, royal assent was given to Bill C-82 (An Act To Implement a Multilateral Convention To Implement Tax Treaty Related Measures To Prevent Base Erosion and Profit Shifting). This is another step in the progress of the multilateral instrument (MLI), which sits on top of and modifies bilateral tax treaties in order to curb tax treaty abuse and achieve the OECD’s BEPS goals. As the MLI gets closer to full implementation, it is useful to review the effective dates and examine a software tool provided by the OECD to analyze the impact of the MLI on any pair of countries…
Post Mortem Pipeline Fails For Non-Resident Beneficiaries
by Henry Shew
Feb 13, 2019
On the death of the owner of a private company, taxes are payable on the deemed disposition of shares, and taxes are payable again on funds being withdrawn from the company. Pipeline transactions seek to avoid this second level of tax; however, where a non-resident beneficiary is involved, pipeline transactions no longer seem to work after the enactment of amendments to section 212.1 on December 13, 2018 (Bill C-86). The stated purpose of these amendments is far different, so this effect may be unintended. There may be reason to hope for a fix through corrective legislation or CRA interpretation…
Safe Income May Vary Within Shares of the Same Class
by Henry Shew
Aug 31, 2018
The anti-surplus-stripping provision in subsection 55(2), which can recharacterize a dividend as a capital gain, is not of concern if the corporate group has sufficient safe income (retained earnings with certain adjustments). However, one peculiarity of the calculation of safe income is that safe income on hand is calculated on a share-by-share basis, based on the length of time that the shareholder has owned that particular share…
Investing with a Foreign Broker and Buying Canadian Shares
by Henry Shew and Randa Galloway
May 31, 2018
Foreign brokers can attract Canadian investors, perhaps because of low management fees. The foreign broker may purchase some Canadian shares (either on a foreign exchange or on the TSX). These shares should be treated as Canadian for the purposes of dividend tax credits and foreign tax credits (FTCs), but as foreign for the purpose of form T1135 filings; this counterintuitive treatment can lead to errors…
Withholding Tax on Capital Distributions to Non-Residents
by Henry Shew and Matthew Cho
Aug 31, 2017
It is generally understood that income distributions by trusts to non-resident beneficiaries are subject to part XIII withholding tax (paragraph 212(1)(c)), but many people are confused about whether to withhold on capital distributions by trusts to non-residents. Such distributions are common in, for example, family trusts where some family members have moved to the United States…
Taxation of Canadian residential real estate: what non-residents need to know
by Michael Cadesky, FCPA, FCA, FTIHK, CTA, TEP
Aug 24, 2017
This article provides a quick summary of important points concerning the taxation of Canadian residential real estate for non-residents of Canada.
The Canadian real estate market has attracted a lot of attention from foreign buyers. The Toronto and Vancouver residential property markets have had extraordinary price increases (for example a 30 per cent increase in Toronto in one year). This has caused governments at all levels, federal, provincial and municipal, to focus on the area. The result has been…
MNR v. KPMG: Professional Duty Overruled
by Henry Shew and Jody Wong
Feb 28, 2017
In Canada (National Revenue) v. KPMG LLP (2016 FC 1322), KPMG sought unsuccessfully to quash an order to disclose confidential information relating to its unnamed clients on the basis of CPA Ontario’s Code of Professional Conduct (“the code”)…
Multi-Level Farming Structures and the Capital Gains Exemption
by Henry Shew and Jody Wong
Aug 31, 2016
Taxpayers selling a farming (or fishing) business will want to have the assets that are being sold qualify as “qualified farm or fishing property” (QFFP) so that the sale will be eligible for the capital gains exemption of $1 million in 2016 under subsections 110.6(2) and (2.2) (the farming exemption)…
Section 119: Flawed Relief from Departure Tax
by Henry Shew
May 31, 2016
Section 119 is designed to provide relief from double taxation when an individual emigrates from Canada. Absent such a provision, an individual might be subject to tax under both part I and part XIII of the Act. Because relief does not exist in all situations, care should be taken when one is analyzing a departure situation…
Doing Business In Canada
by Michael Cadesky, FCA, FTIHK, TEP
Sep 03, 2014
This chapter is a general overview of Canadian tax principles and has been prepared by Cadesky and Associates LLP, a Canadian and International Tax Advisory firm. Comments should be regarded as a summary and should not be considered to be specific advise with respect to any issue.
