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Collections — holding off on collecting on incorrect GST/HST assessment GST/HST and income tax — real estate agent built home for personal use GST/HST — advertising services GST — air travel commissions GST/HST — assessment of real estate agent on sale of condo was statute-barred GST — builder built home for personal use GST — builder of new home was not who CRA thought it was GST/HST — Cancelling interest on "wash transaction" GST — cleaning up years of failure to charge GST on management fees GST — community centre construction GST/HST — convincing CRA that it was too late to assess GST — corporation providing health care services GST/HST — couple built one home for sale and one to live in GST/HST — credit for net tax wrongly remitted GST — dental clinic GST — directors' liability (car dealership) GST — directors' liability (company dissolved) GST — director's liability (construction contractor) GST — director's liability (corporate lawyer) GST — directors' liability (person never agreed to be a director) GST — directors' liability (public company) GST — director's liability (restaurant owner) GST — directors' liability assessment — individual was never a director GST — employee rebate more than 10 years back GST/HST — exported goods GST/HST and income tax — family built home for personal use GST/HST — fixing a failed voluntary disclosure GST — full input tax credits allowed GST — getting CRA to honour a retroactive registration GST — golf club memberships GST — home renovation was not substantial renovation GST — input tax credits allowed without documentation GST/HST — input tax credits for GST incurred before registration GST/HST — input tax credits for joint venture investment GST/HST — input tax credits for legal fees on selling company shares GST — input tax credits justified GST/HST — input tax credits — “medical” company was not making exempt supplies GST/HST — input tax credits on bulk purchases of iPhones GST/HST — input tax credits on inputs to exempt supplies GST/HST — input tax credits on purchase of old home for new project GST — input tax credits on land held for development GST/HST — input tax credits to charity for cost of land GST/HST — input tax credits where CRA had cancelled supplier's GST registration GST/HST — input tax credits where invoices addressed to different company in group GST — interest reduced to reflect offsetting rebate GST/HST — ITCs for joint venturer GST — liability of charitable institution for unremitted GST GST/HST — litigation over real estate purchase GST/HST — mail processing company ruinous assessment averted GST — medical devices GST — miscellaneous adjustments GST/HST — new housing rebate GST/HST — net tax refund approved GST/HST — no HST on settlement received but ITCs on termination payment GST/HST — no "substantial renovation" of apartment building GST — partnership assessment was out of time GST — purchase of real estate GST/HST — purchases by President as agent GST — rebate for ship towed out of the country GST/HST — rebate to builder of student residence GST — recognizing when a second objection had to be filed GST/HST — recovering HST not paid on sales incentives GST/HST — recovering tax from customers after CRA assessment GST — reducing assessment by almost 90% GST/HST — reducing assessment on self-supply of new home GST — registrants were not associated GST — reopening audit after expiry of appeal period GST/HST — resolving dispute between buyer and seller of land GST — retroactively deeming a business to be GST-registered GST — sales of condominiums GST — school board's liability eliminated GST — services to insolvent companies were zero-rated GST/HST — services to US company were zero-rated GST/HST — services were zero-rated GST/HST — showing purchaser that real estate sale was exempt GST — stopping a client from being driven out of business GST — summer camp teaching English as a second language was exempt GST — tax on purchase of commercial property GST — tire installer neglecting to bill GST GST — townhouse renovations GST/HST — valuation of student residence GST — voluntary disclosure — negotiating interest relief and income tax offset GST — voluntary disclosure accepted GST — voluntary disclosure of GST collected on commercial rents GST — voluntary disclosure of management fees GST — waiver of interest GST — waiver of interest and penalty GST — waiver of penalty GST — wash transaction GST — were courses educational or recreational? HST and the Ontario Staycation Tax Credit — correcting the provincial government’s misunderstanding PST — director's liability PST — directors' liability (car dealership) PST — directors' liability re data conversion project PST — eliminating assessment for tax collected by franchisor PST — invoices written up incorrectly PST — reducing tax on sale of book with CD-ROM PST — refund of tax on supermarket construction Income tax — $2 million payment on retirement was tax-free Income tax — another refund where return filed late Income tax — assessment for transfer by tax debtor Income tax — auditor demanding too much Income tax — builder built home as personal residence Income tax — cancelling source deductions assessment Income tax — capital gains vs. income Income tax — charitable donation of kidney beans Income tax — charitable donation to US religious school Income tax — child support deduction Income tax — claiming business losses from past years Income tax — companies were not carrying on Personal Services Business Income tax — consequential reassessment of spouse was statute-barred Income tax — corporation was bare trustee Income tax — cost of building home proven without receipts Income tax — costs of mother's Notice of Objection deductible Income tax — CRA chasing widow for deceased's RRSP Income tax — deduction for Power of Attorney fees Income tax — donations to suspect charity allowed Income tax — expenses against unreported income Income tax — expenses of setting up a film shelter Income tax — general anti-avoidance rule Income tax — getting the $500,000 capital gains exemption Income tax — getting Third Level Fairness review Income tax — income from UN agency was tax-free Income tax — income not earned personally Income tax — intercompany charges deductible Income tax — liability of deceased's estate for UK pension income Income tax — no tax on litigation settlement Income tax — non-resident tax on rental income Income tax — officers of company were acting as outside sales reps, not employees Income tax — over-intrusive audit Income tax — professional fees deduction allowed Income tax — refund to non-resident sellers of property Income tax — refunds where returns filed late Income tax — "reserve" was not a reserve Income tax — RRSP on death Income tax — sale of condo was not a "flip" for profit Income tax — sale of rental property by non-resident Income tax — tax savings on selling home Income tax — taxpayer did not realize she was non-resident and exempt from Canadian tax Income tax — trust for disabled child Income tax — voluntary disclosure Income tax — wages of family members were deductible Income tax — waiver of RRSP penalty tax Income tax — waiver of TFSA penalty tax Income tax — withholding tax on deemed dividend Income tax and GST — real estate agent's business expenses Collections — execution preventing sale of property Payroll withholdings — directors' liability (company dissolved) Payroll withholdings — directors' liability (public company) Payroll withholdings — penalty for late remittance Your problem goes here
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Income tax — sale of rental property by non-resident My clients, a married couple, had been Canadian-resident but moved to the US in 1999. They bought a vacation home in Canada in 2010 and used it for some years, but then decided to rent it out. Eventually they decided to sell the home. They had a loss on the sale, as its value had not increased from what they paid to buy it and perform capital improvements. Since the sellers were non-resident, the buyer was required to withhold a percentage of the purchase price and send it to CRA, unless the sellers obtained a “section 116 certificate” from CRA confirming that any tax on the capital gain had been paid. As is common practice among real estate lawyers, the sellers’ lawyer undertook to the buyers to hold in her trust account 25% of the sale price pending obtaining the certificate. The sale closed on that basis. Unfortunately, the sellers took a long time to track down records of their capital improvement costs, and did not apply to CRA for a certificate for over a year. CRA’s Non-Resident Dispositions section refused to issue a certificate because the application was late (it’s supposed to be sent no later than 10 days after the sale). Then CRA demanded that the buyers pay 50% (not 25%) of the purchase price as required by section 116, because the property was a rental property and thus “depreciable property” (on which capital cost allowance might have been claimed). The buyers’ lawyer contacted the sellers’ lawyer, who came to me for help. Meanwhile the seller’s lawyer still had the funds in her trust account. I wrote to and spoke with the Non-Resident Dispositions official to resolve the matter. Technically she was right that the withholding obligation was 50%. I arranged for the seller’s lawyer to send CRA the funds she held in trust, so that 25% had been paid. I filed T1 returns for the sellers showing the disposition and that they had no capital gain and no tax payable, so all of the 25% paid could be refunded to them. Then I convinced the CRA officer to refrain from seeking the remaining 25% from the buyer, who understandably would not want to pay out an additional $340,000 two years after the closing (even though the buyer was legally liable to pay this amount). Given that no tax was actually payable, the CRA officer agreed to drop the matter (despite the legal requirement to pay 50%), and simply process the T1 returns, giving credit to the sellers for the 25% that had been remitted. Problem solved! (2023)