Personal:
- You need to file a
statement of income and expenses if you received income from
rental of real estate or other real property.
If you are a co-owner of the rental property, your share
of the rental income or loss will depend on your share of
ownership. Generally,
you can deduct any reasonable expenses incurred to earn rental
income.
If
you rent part of the building where you live, you can claim the
amount of your expenses that relate to the rented part of the
building.
- Consider taking a low interest or no interest loan from your
company or employer, and use the money to pay down
non-deductible personal debt. The additional tax you pay on the
taxable benefit associated with the low interest or no interest
loan will be less than the interest you save by paying down your
debt.
- Take advantage of stock options. They can give you ownership
and a good investment at a bargain price, and the tax associated
with them can be reduced if they are structured properly. In
addition, recent government budget proposals make them even more
attractive.
- If you have realized capital gains during the year, consider
offsetting this income by selling any investments with an
unrealized capital loss before year-end.
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Business or
Corporate:
- If you are in a low income or loss position in the current
year, you may wish to wait to claim a capital cost allowance
deduction until a higher income year.
- All property acquired in the year that was available to be
used can be depreciated. Ensure purchases are made by year-end.
- Since only property that you own at the end of the year is
available for a capital cost allowance, sell early in the next
year.
- The salary paid to a family member may allow that individual
to become eligible for CPP and RRSP contributions.
- For tax purposes, the capital cost of a car is limited to
$30,000 plus PST and GST. This means that if you purchase a
$40,000 car for your business, you will lose a portion of the
capital cost allowance deduction. Also if you are a GST
registrant, you may only claim a GST input tax credit based on
the $30,000 limitation, (i.e. $2,100). Therefore you should
consider buying a car for less than $30,000.
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