Hi all,
I have a holding corporation whose income is mostly (90% passive from RE and the rest is from active management of other businesses) but I can’t find where in the software to segregate/document passive income. so the tax is calculating as if all was active income. Anyone knows the forms or checks that I am missing
Complete schedule 7
Many Thanks,
Norman Adams
6733 Rideau Valley Drive South, P.O. Box 160, Kars, ON K0A 2E0 Phone: (613) 489-3583 x227 | Toll Free/Fax: 1-888- 877-2505
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Thank you Norman
And if it’s from a rental, use the Rental Worksheet and Schedule 7 will complete itself.
But why taxcyle does not raise a message to complete Sch 7. I used Taxprep and it asked to complete Sch 7.
It does if you enter dividend and/or interest income in the proper boxes in the GIFI. If you put capital gains from sale of investments, they should be reported on Schedule 6 anyway, which flows to Schedule 7.
Rental income doesn’t flag a diagnostic and perhaps they could add that. However, there is the slight possibility that real estate rental income is active if it’s from an associated company that is active. Nonetheless, I think a diagnostic for rental income and capital gains would be helpful.
Then again, (and not to sound mean) if someone needs a diagnostic to remind you to prepare Schedules 3, 6 or 7 of a T2, then maybe one needs to brush up on their T2 preparation.
There are many schedules that don’t get flagged for preparation/confirmation when there are easy GIFI triggers for them that I have seen missed very often:
A diagnostic for Schedule 11 to be prepared if/when there is a shareholder balance in the GIFI, that would be an easy addition as well (if shareholder balance, confirm S11). In my many years of reviewing T2s prepared by new/experienced associates, Schedule 11 is always missed.
Schedule 33 is less important but I’ve never seen diagnostics for it either. It should be flagged if there are related corporations on S9 or if equity is closing in on $10 mil before any adjustments to S33.
And on that note, another easy flag would be if there is a due from/to related parties, then Schedules 9 and 23 should be looked at.
@jeremy1 Thanks for your suggestions. I will add it to our system and see what I can do. @yourcpa Our support got your email yesterday. As far as S7 message goes, can you post or email us the screenshot or the Taxprep file with the message from Taxprep to understand the situation why a message to complete S7 is triggered. With rental income, if it is passive income, all you would need to do is to fill out the Rental worksheet in T2 and that would flow to top of S7 lines for rental income.
Steven
@jeremy1 In the next T2 release, you will see a review message about completing S11 in T2. I have not added the other 2 messages but I will keep them in our system for a future implementation.
Steven
