taxdetective-Sandusky-Register

“I own what?” Get ready for income trust confusion Advisor.ca

Seems I'm not the only voice out there warning about the change in what you own... but there's no discussion about tax consequences, at least not yet. I'm sure that's next....

Finance - Property Tax Deferment Program

Are you over 55 or do you qualify for a deferrment because of a disability?

The age dropped from 60 to 55 for deferral of property taxes in BC several years ago.

These two articles are about using free online services, Dropbox and SugarSync.  My tech guy, Malcolm thought this is useful and I agree! 

Questions and answers - Canada Revenue Agency letter campaign

Did you receive a letter last year or if you receive one this year, don't ignore this, take it as a warning sign that it's time to overhaul your record keeping system to minimize the downtime when the auditor arrives to review your documentation.

My new e-book: How to 'Jump-Start' your tax preparer provides checklists of how to organize your records to make the audit less painful.

How does this happen?

It always amazes me how people get away with things like this, but then I remember my first full time job. I worked as a teller at the Bank of Montreal Marine Building in 1972/73. The women who managed us and met customers at the side counter would walk over and give me pre-approved instructions to close inactive accounts. If someone came to the wickets, we were instructed to send them to her to be vetted. I still remember the inactive account cards in their special tray. She would pull the card, go back to the person to get their ID, then ask a teller to cash out the account. This would happen often enough that I still remember the process. I had no idea she was a fraudster.

Many years later, I read what she was accused of and eventually charged with and how much. I now know how exactly how she did it. She was intimidating. I was scared of her. She was grumpy and older, she had experience. Since I didn't know much about how things worked, what she said was law. If she told me to jump, it wasn't a case of jumping, I'd ask exactly how high. I was 18, living on my own, and this job meant basic food, shelter and clothing and quite a bit of fun. Keeping her happy was important because she could make my life miserable. Living in the west end, foreign ships docked at the foot of Burrard, and sailors from all over the world exchanging their money, branch staff parties every week where alcohol flowed freely...it was a great job. I saved $100 a month, enough to travel across Canada for four months after working there for ten months.

But those visitors at the side counter, they may not have been customers whose accounts were inactive, they may have been her friends, cohorts or they could have been legitimate customers who had no idea what she was doing when she asked them to wait. She would take the cash from me, rather than have the person stand in line, and of course I trusted her to take their ID and vet they were entitled, and of course, I'd have a lineup, so I'd never have time to watch her give the money to that person at the counter, or she'd stop along the way, and I wouldn't track her all the way to the person at the side counter who was supposedly the inactive account she was to hand the money over to.

This is only one of many unit trusts that will require analysis by your tax preparer this tax season...

Canadian Royalty Trusts

I love it, there's a 'dividend detective'... and they've listed all the unit trusts affected in 2010...

Westshore Terminals Limited Partnership - Investors - Financial Information

This is one of the more complex investment transactions you may encounter in your year end reporting for 2010.

Sorry folks, brain slippage... not Enbridge, Encana.

Encana reorganized and then split into Encana/Cenovus.  If you owned shares during the period of these transactions, you're going to have deemed dispositions, and choices about deferral of gains/losses and S. 85 rollovers to consider. 

Most unit trusts will require a disposition calculation and a re-acquisition of something new during 2010.  You'll have to dust off your ACB calculations for those ROC's over the years.

Did you know that if ROC (return of capital) turned the ACB into a negative, that you had a deemed capital gain required to bring the ACB back to nil each year?

Most unit trusts will be converting to shares before Jan 1, 2011.

There may be some complex structures like Westshore Terminals new stapled units, which are a combination common share and promisory note which isn't liquid until 2016 and must be sold as a package

New ITA sections
S. 85.1(7) exchange,
S 107(3.1) redemption

and potential joint election under S. 85 rollovers (EnCana/Cenovus) to defer gains but with limited time to request/file (Enbridge owners received notices prior to the end of 2010 about their deal in November 2009, which should have been reported last year on your return as a deemed disposition (twice actually, once when the original shares were redeemed and then again when the shares were exchanged for Cenovus)

Ask me for the article I wrote that was never published because no one would believe me that this was even remotely possible.

ITNEWS-40 - Income Tax - Technical News No. 40

Doing your T4's and wondering what the last word on Employee gifts & award is?

IT NEWS-40 is where you find the story behind the rules...
It used to be that if it was over $500 the whole amount was taxed, but that's been rescinded..

as of Jan 1, 2010 here's the new rules:
$500 limit
Where aggregate exceeds $500, only excess is taxable
New long service aware, every five years, $500
Average allowed over five years is $600 per year

for more history and dates, best to read up on the link.

Polymath - Wikipedia, the free encyclopedia

Learned a new word today. I like this one. It's so interesting to be around a polymath, you'll never know what you'll learn next! Being married to one can have it's challenges though, especially in the 'math' part...

Free Mobile App Stops Texting While Driving - DriveSafe.ly

Isn't this cool? But when I'm driving, I wouldn't even worry about getting email, because that's likely the only time other than when I'm out stomping in puddles in my new red rubber boots, that my brain rests and I get creative time in.

TaxDetective®: Search for civil and criminal records

The other great place to search is www.canlii.org

Either by typing CSOSearch into Google or by linking to this BC Online page, the next time you wonder if someone has a record in BC, type in their name in both civil and criminal to see what comes up.

I discovered that the woman who rear ended me coming off the Oak Street Bridge back in 1992, even though the claim was I settled with ICBC before it ever went to court, is listed under my name.

Check your own name...and your employee new hires...

Consulting with Canadians

Have a great idea about how this country could operate better? Is it burning a hole in your brain? Here's your chance to share it with the Finance Minister...

Interest and penalties

If grandma gets a repeated failure penalty, it's going to be 10% federal and 10% provincial tax (yes, that 20%) of the income not reported, yes you read that right, it's not 10% of the tax owing, it's 10% of the income not reported.

If it's not paid, they'll guarnishee her bank account.

Time to organize grandma's financial affairs? Long before she starts receiving those kinds of penalty notices.

My new guidebook, with a revised title, How to 'jump-start' your tax preparer, formerly called Financial and Tax Literacy GuideBook, is found on my shopping cart.

Coming soon, downloadable Word formatted forms to complete your due diligence.

Calendar

You'll kick yourself if you miss these opportunities:

Learn how to use about Profile T1 software, this is 3.5 hours online either Jan 27th or Feb 2. Accounting Cycle has put together a great course guidebook with my input of course, and I'm presenting!

Choose to become a 'power user' in QuickBooks software by spending a day with me at the CMA conference (CGA's and CA's would be welcome if there's still seats left...)

GST/HST - Invoice requirements

If you provide documentation, when was the last time you ensured you were compliant? or if you receive documentation for purchases, do you check to see that it's complete before you claim an ITC on your GST/HST return?

GST/HST - Exceptions to invoice requirements

Keep your receipts unless you plan to do a lot of work...
I love this page...

Residential Energy Credit The Harmonized Sales Tax
Remember to opt out of this credit if you have a home office that qualifes for a claim for tax.
You can claim the personal portion of the credit once a year if you feel so inclined.
If you don't opt out you can be fined for accepting this automatic credit in BC!

http://www.taxdetective.ca/catalog/item/6427752/7621236.htm

Join the conversation!

Financial literacy talks in Delta Libraries were well received, just noticed a mention in The Province! which also got picked up by CGA BC, thanks!!

Does anyone know of a software that would help me to quickly create input forms that people could save on their computer that are more flexible than Word created Tables?  The request every time I sell my guidebook which was created for this workshop is that it would be nice if the Checklists could be updated by typing in the data rather than handwriting it, and then stored on their computer.  I don't think people want this out there in the cloud.

In the Loop - Standards in Transition Chartered Accountants of Canada

There are way too many changes, way too fast... between tax and accounting, how does one keep up?

Charities and Giving - Charities Information Webinar Registration Page

Free PD for those in the field.

Tax tip - The Canada Revenue Agency's Tax-Free Savings Account tips: What you need to know

A wise man, Richard Shillington, is writing a book on retirement for the rest of us. Watch for it this year. His premise before RSP's was that if you didn't have $100,000 in an RSP you shouldn't have one at all as it would diminish your other benefits such as reductions in Medical premiums for provincial plans, GIS income, and would increase the cost of your care as you are required to include at least a minimum amount in your income each year after 71 years of age.

It will be interesting to see what he says the figure should be now that we're in the third year of TFSA's. I suspect we shouldn't have an RSP unless we have well over $100,000 in one.

Have you opened an account yet to shelter your loose savings from tax on the interest income? That's a perfect use of this vehicle to get you started. Just throw it in either a high interest savings account or a GIC (Term Deposit) on a rate riser plan and watch it grow. If you need it, you can always remove it, but out of sight, out of mind, maybe that's a good thing.

Check out ING and your local credit union for the best rates for those types of savings and start now, even if it's not the full allowable amount. Habits are hard to start but harder to break.

“I own what?” Get ready for income trust confusion Advisor.ca

If you owned Income Trust Units, the shares issued in exchange may have completely different naming...make sure to check your next statement of account from your brokerage firm to determine how many shares you received for the units you owned. If you have paperwork from the Unit Trust that explains the transaction, please give that paperwork to your tax preparer, they will need it.

Card tricks CAmagazine.com

I'll bet you never looked at Gift Cards this way before...

Changes to the Canada Pension Plan (CPP)

Thinking about packing it in at 60? This page explains how the changes will affect your benefits from CPP.

Dealing with Debt – A Consumer’s Guide GrossmanCGA on insolvency in Canada

This is a good primer on insolvency.

T2201 - Disability Tax Credit Certificate

Note that this form now requires a legal representative, not just a representative!

RC4064 - Medical and Disability-Related Information 2010

The new guide is out!

Authorized Medical Practitioners by Province for Purposes of Claiming Medical Expenses for the Medical Expense Tax Credit

Depending on which province/territory you are in, your podiatrist may or may not be licenced for you to make a claim for medical expenses... check this list for the practitioners you see where you are to determine which ones qualify as long as their services aren't for cosmetic purposes...