{"id":117,"date":"2021-12-14T15:59:53","date_gmt":"2021-12-14T15:59:53","guid":{"rendered":"https:\/\/canadiantaxpodcast.ca\/?p=117"},"modified":"2021-12-14T15:59:54","modified_gmt":"2021-12-14T15:59:54","slug":"canadian-tax-podcast-028-rental-suites-us-llc-capital-gains","status":"publish","type":"post","link":"https:\/\/canadiantaxpodcast.ca\/index.php\/2021\/12\/14\/canadian-tax-podcast-028-rental-suites-us-llc-capital-gains\/","title":{"rendered":"Canadian Tax Podcast 028: Rental Suites, US LLC, Capital Gains."},"content":{"rendered":"\n<p>Canadian Tax Podcast for the week of December 14, 2021. This week we cover:<\/p>\n\n\n\n<ul><li>CRA website down (again);<\/li><li>US Electric Vehicle subsidy drama;<\/li><li>CEWS audits resume;<\/li><li>Moneysense tax tips released;<\/li><li>Expense vs. Capital improvements for rental suite;<\/li><li>US LLC troubles;<\/li><li>Capital gain vs business income on investment trades;<\/li><\/ul>\n\n\n<p><!--more--><\/p>\n\n\n<h2>[INTRO]:<\/h2>\n\n\n\n<p>\u201cThis is the Canadian Tax Podcast, <strong>Episode # 028<\/strong>, hosted by me, Cameron Ware. Good morning\u201d<\/p>\n\n\n\n<h2>[NEWS SECTION]<\/h2>\n\n\n\n<ol type=\"1\"><li>\u201cHappy Tuesday, it is the week of <strong>December 14, 2021.<\/strong> We\u2019ll start with the news.<\/li><\/ol>\n\n\n\n<h2>ITEM [1] \u2013 CRA WEbsite Offline Due to Security threat<\/h2>\n\n\n\n<ul><li>The CRA has taken down their website after a potential global security threat<\/li><li>CRA was not alone in this, as many organizations around the world were vulnerable<\/li><li>Log4Shell exploit.<\/li><li>There has been no indication that any tax payer information was stolen.<\/li><li>It is still early, but as of now there is limited information available.<\/li><li><a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/e-services\/updates.html\">https:\/\/www.canada.ca\/en\/revenue-agency\/services\/e-services\/updates.html<\/a><\/li><li><a href=\"https:\/\/www.theverge.com\/2021\/12\/10\/22828303\/log4j-library-vulnerability-log4shell-zero-day-exploit\">https:\/\/www.theverge.com\/2021\/12\/10\/22828303\/log4j-library-vulnerability-log4shell-zero-day-exploit<\/a><\/li><li>&nbsp;<\/li><\/ul>\n\n\n\n<h2>&nbsp;[ITEM 2] \u2013 Canada makes aggressive stance on the US EV Credit<\/h2>\n\n\n\n<ul><li>Canada has now made a more aggressive stance, threatening to impose new tariffs.<\/li><li>EV Bill has passed through Congress, now on to Senate.<\/li><li>The EV tax credit could cause severe harm to Canada\u2019s 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.<\/li><li>My guess: targeted tariffs like we did with the aluminum issue when Trump was in. ie. Kentucky Bourbon<\/li><li><a href=\"https:\/\/globalnews.ca\/news\/8443831\/us-ev-tax-credit-canada-threats-explainer\/\">https:\/\/globalnews.ca\/news\/8443831\/us-ev-tax-credit-canada-threats-explainer\/<\/a><\/li><li>&nbsp;<\/li><\/ul>\n\n\n\n<h2>[ITEM 3] \u2013 CRA Resumes CEWS Post-Payment Audit Program<\/h2>\n\n\n\n<ul><li>CRA has announced it is resuming its CEWS post-payment audit program as of Fall 2021.<\/li><li>Stakeholder email sent out Dec 7<sup>th<\/sup>.<\/li><li>This is the wage subsidy program used by employers.<\/li><li>CRA is going to contact claimants, and request relevant docs to verify revenues and payroll. Link to CRA\u2019s FAQ where they detail specifics about what paperwork is needed.<\/li><li>&nbsp;<a href=\"https:\/\/www.cpacanada.ca\/en\/business-and-accounting-resources\/taxation\/canadian-tax-news\">https:\/\/www.cpacanada.ca\/en\/business-and-accounting-resources\/taxation\/canadian-tax-news<\/a><\/li><li><a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/subsidy\/emergency-wage-subsidy\/cews-frequently-asked-questions.html#q33\">https:\/\/www.canada.ca\/en\/revenue-agency\/services\/subsidy\/emergency-wage-subsidy\/cews-frequently-asked-questions.html#q33<\/a><\/li><li>&nbsp;<\/li><\/ul>\n\n\n\n<h2>[ITEM 4] \u2013 Tax Tips for 2021 Season<\/h2>\n\n\n\n<ul><li>MoneySense has released their tax tips for Canadians in 2021.<\/li><li>Decent resource covering personal tax tips.<\/li><li>2022 the $400 flat rate home office deduction is still in place. Dividends vs salary in terms of claiming childcare.<\/li><li><a href=\"https:\/\/www.moneysense.ca\/save\/taxes\/2021-tax-season-best-tax-tips-canada\/\">https:\/\/www.moneysense.ca\/save\/taxes\/2021-tax-season-best-tax-tips-canada\/<\/a><\/li><\/ul>\n\n\n\n<p>LISTENER QUESTIONS<\/p>\n\n\n\n<ul><li>Tax deduction on work done to legalize basement rental.<ul><li>[Question]<\/li><\/ul><ul><li>Usual: It depends.<\/li><\/ul><ul><li>Capital additions vs expense.<\/li><\/ul><ul><li>Trap: Principal residence deduction. Capitalize and take CCA = lose portion of principal residence. Don\u2019t take CCA on rentals.<\/li><\/ul><\/li><li>What is the most effective way to receive dividends from US LLC as a Canadian?<ul><li>[Question]<\/li><\/ul><ul><li>Trick question: There isn\u2019t. Double tax.<\/li><\/ul><ul><li>US flow-through, pay US personal tax. Canada says that\u2019s corporate tax, not personal tax, so you don\u2019t get a foreign tax credit. US draws\/payments treated as foreign dividend.<\/li><\/ul><ul><li>If you\u2019re Canadian: Don\u2019t own a US LLC.<\/li><\/ul><\/li><li>Capital Gain or Income<ul><li>[Question]<\/li><\/ul><ul><li>Usual: active trading vs sitting on asset.<\/li><\/ul><ul><li>Case by case basis. Casual trades here and there, capital gain. Day-trading with options etc, arguably business income.<\/li><\/ul><ul><li>Always irony here: When you make money, everyone wants capital gains (50% taxable). Losses, everyone wants business (deductable against other income.)<\/li><\/ul><ul><li><br><br><\/li><\/ul><\/li><\/ul>\n\n\n\n<p>That will wrap things up for today. Like always, if you have any questions, send them to <a href=\"mailto:questions@canadiantaxpodcast.ca\">questions@canadiantaxpodcast.ca<\/a>, or find us on twitter: <a href=\"https:\/\/twitter.com\/cdntaxpodcast\">https:\/\/twitter.com\/cdntaxpodcast<\/a>&nbsp;&nbsp;<\/p>\n\n\n\n<p>This is Canadian Tax Podcast, thanks for listening.&nbsp;<\/p>\n<iframe src=\"https:\/\/player.blubrry.com\/?media_url=https%3A%2F%2Fmedia.blubrry.com%2Fcanadiantaxpodcast%2Fcontent.blubrry.com%2Fcanadiantaxpodcast%2F2021-12-14_CTP028.mp3&amp;podcast_link=https%3A%2F%2Fcanadiantaxpodcast.ca%2Findex.php%2F2021%2F12%2F14%2Fcanadian-tax-podcast-028-rental-suites-us-llc-capital-gains%2F#mode-Light&border-000000&progress-000000\" scrolling=\"no\" width=\"100%\" height=\"165\" frameborder=\"0\" id=\"blubrryplayer-1\" class=\"blubrryplayer\" title=\"Blubrry Podcast Player\"><\/iframe><p class=\"powerpress_links powerpress_links_mp3\" style=\"margin-bottom: 1px !important;\">Podcast: <a href=\"https:\/\/media.blubrry.com\/canadiantaxpodcast\/content.blubrry.com\/canadiantaxpodcast\/2021-12-14_CTP028.mp3\" class=\"powerpress_link_pinw\" target=\"_blank\" title=\"Play in new window\" onclick=\"return powerpress_pinw('https:\/\/canadiantaxpodcast.ca\/?powerpress_pinw=117-podcast');\" rel=\"nofollow\">Play in new window<\/a> | <a href=\"https:\/\/media.blubrry.com\/canadiantaxpodcast\/content.blubrry.com\/canadiantaxpodcast\/2021-12-14_CTP028.mp3\" class=\"powerpress_link_d\" title=\"Download\" rel=\"nofollow\" download=\"2021-12-14_CTP028.mp3\">Download<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>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;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[21,33,27],"tags":[],"_links":{"self":[{"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/posts\/117"}],"collection":[{"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/comments?post=117"}],"version-history":[{"count":1,"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/posts\/117\/revisions"}],"predecessor-version":[{"id":118,"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/posts\/117\/revisions\/118"}],"wp:attachment":[{"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/media?parent=117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/categories?post=117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadiantaxpodcast.ca\/index.php\/wp-json\/wp\/v2\/tags?post=117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}