# Income tax SALES don't equal HST SALES

**URL:** <https://www.protaxcommunity.com/t/income-tax-sales-dont-equal-hst-sales/4603>\
**Category:** Tax Topics\
**Created:** [April 27, 2021, 4:26pm UTC](https://www.protaxcommunity.com/t/income-tax-sales-dont-equal-hst-sales/4603 "2021-04-27T16:26:14Z")\
**Posts on this page:** 3\
**Page:** 1

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**Author:** ![NiceGuy](https://avatars.discourse-cdn.com/v4/letter/n/8edcca/32.png) [@NiceGuy](https://www.protaxcommunity.com/u/NiceGuy)\
**Post date:** [April 27, 2021, 4:26pm UTC](https://www.protaxcommunity.com/t/income-tax-sales-dont-equal-hst-sales/4603/1 "2021-04-27T16:26:14Z")

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e.g. Used piece of equipment sold for **$5,000.00 & 13% HST** was charged.  
Total of **$5,650.00**. Book value of equip was **$7,000.00** (terminal loss: **$2,000.00** )

$5,000.00 equipment sale goes into **line 101**  
$650.00 HST collected goes into **line 105**

However, now _HST sales will be a higher amount than sales for income tax purposes_.

Is there an issue with this or just a normal occurrence when certain transactions like this occur?

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**Author:** ![cory](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/cory/32/1073_2.png) [@cory](https://www.protaxcommunity.com/u/cory)\
**Post date:** [April 27, 2021, 4:43pm UTC](https://www.protaxcommunity.com/t/income-tax-sales-dont-equal-hst-sales/4603/2 "2021-04-27T16:43:13Z")

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> [@NiceGuy](#):
>
> e.g. Used piece of equipment sold for **$5,000.00 & 13% HST** was charged.  
> Total of **$5,650.00**. Book value of equip was **$7,000.00** (terminal loss: **$2,000.00** )
> 
> $5,000.00 equipment sale goes into **line 101**  
> $650.00 HST collected goes into **line 105**
> 
> However, now _HST sales will be a higher amount than sales for income tax purposes_ .
> 
> Is there an issue with this or just a normal occurrence when certain transactions like this occur?

The CRA often does a check of T2 income to line 101 on the GST\HST return. I do not know for certain if they check to see if there has been a sale of assets on the T2.

If they do question the variance, they will either call you or send a letter asking for an explanation of the difference. A variance due to a sale of assets is not likely to lead to an audit.

In my experience, I’ve never gotten asked to explain a variance when Line 101 on the GST\HST return is \> T2 reported income.

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**Author:** ![joe.justjoe1](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/joe.justjoe1/32/220_2.png) [@joe.justjoe1](https://www.protaxcommunity.com/u/joe.justjoe1)\
**Post date:** [April 27, 2021, 6:54pm UTC](https://www.protaxcommunity.com/t/income-tax-sales-dont-equal-hst-sales/4603/3 "2021-04-27T18:54:09Z")

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This is normally a question which should be highlighted by the bookkeeper to the year-end Accountant of the business/corporation (Gain/Loss on sale of assets, and related taxation, who will have a working paper on GST/HST at YE).