Canada recently increased the tax rate on capital gains. So, investors are asking: “how to avoid capital gains tax in Canada”? This post will provide Canadian investors with a few strategies to avoid paying capital gains tax. Especially considering recent capital gain tax rate increases. Power of Buy-and-Hold Before discussing ways to avoid capital gains tax in Canada. Let’s consider what makes...
As a Canadian taxpayer, it's important to know the different types of business expenses that you can claim to reduce your taxable income. Claiming these expenses can help to minimize your tax burden and increase your profits. In this post, we'll list the main categories of business expenses that can be claimed in Canada, and provide some description of what...
Canada's Underused Housing Tax (“UHT”) is a new measure that was introduced by the federal government in 2021. Under the UHT, owners of such properties may be subject to an additional tax of up to 1% of the property's assessed value. The goal of this tax is to encourage owners to make better use of their properties and to increase...
In an effort to promote domestic travel and support local tourism, the government of Ontario has announced a Staycation Tax Credit for Ontarians. The credit encourages Ontarians to explore the province's diverse tourism offerings while supporting local businesses hit hard by the pandemic. Here's everything you need to know about the Ontario Staycation Tax Credit. What is the Ontario Staycation Tax...
Many Canadian charitable foundations hold US stocks in their investment portfolio. However, it's essential to understand the application of US withholding tax for Canadian registered charitable foundations in the context of the US-Canada tax treaty to minimize exposure to this tax. And as this post will explain, there's a common mistake many foundations make when structuring their investments that exposes...
Withholding taxes are deducted at source before income is paid to an investor. In the context of Canadian investors with US stocks, withholding taxes refer to the taxes that are deducted by the US government on dividends paid to Canadian residents. But, the US withholding tax rules can be a bit complicated, so this post provides an overview of the key...
In the Canadian context, tax integration refers to the concept of ensuring that the combined tax burden on corporations and their shareholders is roughly equivalent to the tax burden that would be paid if the corporation's income was earned directly by the shareholders. The goal of tax integration is to eliminate or minimize the "double taxation" that can occur when a...
The US-Canada tax treaty, also known as the Canada-United States Income Tax Convention, is an agreement between the governments of Canada and the United States that is designed to prevent double taxation and promote trade and investment between the two countries. The purpose of the treaty is to ensure that individuals and companies who earn income in both Canada and the...
A master limited partnership (“MLP”) is a publicly-traded limited partnership. They payout a high level of cash income investors because of their unique tax structure. Because of this, MLPs are considered “high yield” investments; most suitable for income-oriented investors. How are MLPs taxed? MLPs are not required to pay federal income tax if they meet certain conditions also. Similar business forms, like...
Recently, the American congress passed a law known as the “Inflation Reduction Act” that among other things provides an additional $80 billion USD of funding for the Internal Revenue Service (“IRS”) over 10 years. Supporters claim this extra funding will help the IRS collect more tax revenue by providing the agency with more auditing and compliance resources. We can expect...
