Canadian Tax Podcast 028: Rental Suites, US LLC, Capital Gains.

Canadian Tax Podcast for the week of December 14, 2021. This week we cover:

  • CRA website down (again);
  • US Electric Vehicle subsidy drama;
  • CEWS audits resume;
  • Moneysense tax tips released;
  • Expense vs. Capital improvements for rental suite;
  • US LLC troubles;
  • Capital gain vs business income on investment trades;


“This is the Canadian Tax Podcast, Episode # 028, hosted by me, Cameron Ware. Good morning”


  1. “Happy Tuesday, it is the week of December 14, 2021. We’ll start with the news.

ITEM [1] – CRA WEbsite Offline Due to Security threat

 [ITEM 2] – Canada makes aggressive stance on the US EV Credit

  • Canada has now made a more aggressive stance, threatening to impose new tariffs.
  • EV Bill has passed through Congress, now on to Senate.
  • The EV tax credit could cause severe harm to Canada’s automotive sector. Trade Minister Mary Ng says the EV credit amounts to a 34% precent tariff on Canadian-produced electric vehicles, and violates the US-Mexico-Canada trade agreement.
  • My guess: targeted tariffs like we did with the aluminum issue when Trump was in. ie. Kentucky Bourbon

[ITEM 3] – CRA Resumes CEWS Post-Payment Audit Program

[ITEM 4] – Tax Tips for 2021 Season


  • Tax deduction on work done to legalize basement rental.
    • [Question]
    • Usual: It depends.
    • Capital additions vs expense.
    • Trap: Principal residence deduction. Capitalize and take CCA = lose portion of principal residence. Don’t take CCA on rentals.
  • What is the most effective way to receive dividends from US LLC as a Canadian?
    • [Question]
    • Trick question: There isn’t. Double tax.
    • US flow-through, pay US personal tax. Canada says that’s corporate tax, not personal tax, so you don’t get a foreign tax credit. US draws/payments treated as foreign dividend.
    • If you’re Canadian: Don’t own a US LLC.
  • Capital Gain or Income
    • [Question]
    • Usual: active trading vs sitting on asset.
    • Case by case basis. Casual trades here and there, capital gain. Day-trading with options etc, arguably business income.
    • Always irony here: When you make money, everyone wants capital gains (50% taxable). Losses, everyone wants business (deductable against other income.)

That will wrap things up for today. Like always, if you have any questions, send them to, or find us on twitter:  

This is Canadian Tax Podcast, thanks for listening. 

Leave a Reply

Your email address will not be published. Required fields are marked *