Royalty expenses- Resident (GIFI 9277)

Tax Topics
1

On Schedule 125 of the T2, I inputted an amount for Royalty expenses- Resident (GIFI 9277).

I’m getting a review message: Royalty expenses- Resident (GIFI 9277) are reported in Schedule 125. Consider preparing Schedule 14.

The amount entered in GIFI 9277 represents 5% of the franchisee’s membership fees (revenue) paid to the franchisor.

I have entered the name, address, and royalties paid to the franchisor on Schedule 14 - is there anything else to consider (no T5 slip filed)?

2

I have a couple of Tim Horton’s franchisees as clients and that’s what I have done for many years without issue (GIFI 9277 reported on s.14). So far as I can tell with the information provided your treatment is correct.

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3

ditto for my franchisee clients

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4

Thank you both for your helpful replies!