Plain-language questions and answers about Canadian tax law.
Yes, corporations can apply to the CRA's Voluntary Disclosures Program, which may reduce penalties and interest but never the tax owing.
Read the full answer →A parent on title for an adult child may be a bare trustee, and income and gains are generally reported by the child as beneficial owner.
Read the full answer →Yes, if all RRSP property is transferred directly to the survivor's registered plan by the end of the year after death, no T4RSP is issued to the…
Read the full answer →Yes. If you distribute estate property before getting a CRA clearance certificate, you can be personally liable for unpaid tax, up to the value…
Read the full answer →Yes, the CRA accepts a final T1 before probate if you send proof you are the executor, such as a will, or file Form RC552 where none exists.
Read the full answer →Capital gains tax at death can sometimes be reduced or deferred through a spousal rollover, the home exemption, the lifetime deduction and loss…
Read the full answer →Yes. The CRA can reassess with no fixed time limit for misrepresentation from neglect, carelessness, wilful default or fraud, and must prove it.
Read the full answer →Only one individual can claim the GST/HST new housing rebate on a home, even with several owners, and the rebate is paid to that claimant.
Read the full answer →You can only designate one property per family unit for each year, so with two houses you choose which one to shelter for each year of ownership.
Read the full answer →Yes, an accountant or other representative can file your notice of objection with the CRA, through Represent a Client, but the deadline stays the…
Read the full answer →Whether RRSP money can pay the final tax bill depends on who receives it, and the tax is generally reported on the deceased's final return.
Read the full answer →It may: the CRA lists not remitting employee source deductions like CPP and EI as possibly eligible, but the tax owing must still be paid.
Read the full answer →The CRA's audit manual says the Income Tax Act has no withdrawal provision, so the Minister must confirm the assessment; get advice before acting.
Read the full answer →The CRA taxes the deceased's final return on the full RRSP or RRIF value, but a beneficiary who received the money can be liable for that tax.
Read the full answer →Yes. An individual can appear in person in the Tax Court of Canada, but the general procedure follows formal Rules and costs can be ordered.
Read the full answer →Yes. The proposed increase to a two-thirds inclusion rate was cancelled, and one-half applies to gains realized in 2024, 2025 and 2026.
Read the full answer →An ineligible rebate must be repaid, so selling soon after buying can matter if the primary residence test was not met at the outset.
Read the full answer →Bare trusts need not file a T3 or Schedule 15 for taxation years ending on or after December 31, 2024 and before December 31, 2026.
Read the full answer →If only part of your home's gain is exempt, the rest is a capital gain, and half of it is taxable and reported through Schedule 3 and Form T2091(IND).
Read the full answer →Whether a TFSA is controlled by your will depends on whether a successor holder or beneficiary is named; with no one named, the will governs.
Read the full answer →Yes, the CRA can review rental income and expenses, and unsupported expense claims may be disallowed, so keep invoices, receipts and contracts.
Read the full answer →It depends on how you got the home: builder purchases are tested on total consideration, while owner-built homes are tested on fair market value.
Read the full answer →Moving into long-term care can affect your exemption, depending on whether the home was ordinarily inhabited and whether you can make an election.
Read the full answer →Yes, the CRA lists unreported income as a situation that may qualify for its Voluntary Disclosures Program, if the conditions are met.
Read the full answer →A gift by will is deemed made by the estate, which may carry it back to the final return if conditions are met, subject to donation limits.
Read the full answer →Report each sale on Schedule 3, carry the result to line 12700 of your T1, and add Form T2091(IND) if you sold your principal residence.
Read the full answer →Between $350,000 and $450,000 the federal rebate shrinks by formula and is nil at $450,000 or more; a $400,000 home with 5% GST gets $3,150.
Read the full answer →Payout timing depends on the issuer; the tax dates run to December 31 of the year after death, the deadline for a survivor's exempt contribution.
Read the full answer →A CRA voluntary disclosure generally covers six years of income tax records and four of GST/HST, with ten for foreign items.
Read the full answer →Half of your capital gain is taxable and is added to your other income, so the tax depends on your marginal rate, not one flat rate.
Read the full answer →A disclosure stops being voluntary once an audit or investigation has been initiated for that information; before that, it may still qualify.
Read the full answer →An executor must deal with the deceased's unfiled returns, and is liable for unpaid tax to the extent of the property they control, in Canada.
Read the full answer →Yes. An executor who distributes estate property without a CRA clearance certificate can be personally liable for unpaid tax, up to its value.
Read the full answer →Usually not at death: the spousal rollover passes property to a spouse at the deceased's tax cost, so tax is put off, if the conditions are met.
Read the full answer →After a notice of objection, the Minister reconsiders it; once it is confirmed or reassessed, you have 90 days to appeal to the Tax Court.
Read the full answer →If you forgot to designate your home, you can ask the CRA to amend the return; a late designation may be accepted, but a penalty of up to $8,000 may…
Read the full answer →Ignoring a CRA audit letter can cause delays, a court order to comply and interest on any tax owing. Responding early gives you more options.
Read the full answer →Missing the two-year deadline on a builder purchase generally means the rebate is lost; late relief is only for owner-built homes.
Read the full answer →A trust-governed TFSA with no successor holder keeps limited treatment during the exempt period, then may become a taxable trust filing T3 returns.
Read the full answer →The TFSA's value at death is generally not taxable to beneficiaries, but later earnings may be, and a successor holder simply takes over the account.
Read the full answer →Yes. A CRA Requirement for Documents or Information is mandatory, must give a reasonable deadline, and a judge can order compliance if you refuse.
Read the full answer →A T2029 waiver lets the CRA reassess after the normal period, but only for matters it names. You can limit it and revoke it later using Form T652.
Read the full answer →The Tax Court informal procedure covers amounts in issue of $25,000 or less, or a loss of $50,000 or less, if you elect it; larger ones differ.
Read the full answer →Your home's adjusted cost base is generally what you paid plus acquisition costs and capital improvements, but not routine repairs or maintenance.
Read the full answer →The capital gains inclusion rate in Canada is one-half, so half of a gain is taxable; the proposed increase to two-thirds was cancelled.
Read the full answer →A final return is due April 30 for deaths from January to October, and 6 months after death for November or December deaths. Late penalties apply.
Read the full answer →For a reassessed prior year, individuals generally get the later of one year after the filing-due date or 90 days from the notice date, so check the…
Read the full answer →A bare trust T3 return is due 90 days after year-end, so March 31, 2027 for a December 31, 2026 year-end; late filing can bring penalties.
Read the full answer →Most personal credits, including the age amount, can be claimed in full on a final return without proration, but some limits and exceptions apply.
Read the full answer →If an RRSP has no named beneficiary, its full value is income on the deceased's final return, and the estate bears the tax.
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