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...
Bare trust arrangements can help some investors re-organize their affairs in a way that reduces probate and makes it easier to transfer assets in the future. This post describes what a bare trust is and how it might be used.
A section 85 rollover allows Canadian taxpayers to transfer appreciated property to a taxable corporation without triggering the associated capital gains tax. In other words, a section 85 election allows a taxpayer to defer all or part of the tax consequences that would normally arise on the transfer. This post describes section 85 rollovers and provides two examples of how they might...
Investors end up with capital inside holding companies for a variety of reasons including inheritance, tax & estate planning, and after the sale of an operating business. A holding company (“holdco”) is simply a corporation that earns passive income. Passive income is income earned from investments such as dividends from stocks, interest from loans & bonds, rent from real estate,...
When someone dies owning private company shares, there is a risk of double or even triple taxation. A deceased individual’s estate owning private corporation’s shares may be taxed because of the deemed disposition at death of those shares (capital gains tax).There may be tax payable by the corporation when it sells assets to fund distributions to the deceased person’s estate (capital...
Canadians might be surprised to learn they may be exposed to US estate taxes. This post describes the risks to Canadian investors and how they might protect themselves.
Following political pressure for Canadian charities to spend more of their capital, the federal government announced in their 2022 budget that the Disbursement Quota (“DQ”) for registered charities will be raised to 5%. This post describes the latest changes to the disbursement quota and how they may affect your private foundation.
Administering someone’s estate after they die can be a difficult and heavy responsibility. Before you begin that journey, consider the professionals who can help you fulfill your responsibilities such as lawyers, trust companies, accountants, and bankers. Also consider the legal obligations estate trustees must adhere to. If you’ve been charged with administering an estate or if you’re considering this role,...
This post will describe what a wasting freeze is and consider other issues such as adding leverage and making charitable gifts.
An estate freeze caps the current capital gains tax liability of an asset expected to appreciate and transfers the growth in value to successors. Families use estate freezes to pass down assets to future generations such as kids and grandkids. Businesses also use estate freezes to transition ownership to family members and/or employees.
