My client has a small residential rental building for years, and looking to sell it, expect to make couple millions in profit, she was asking me some best way to take out the profit to avoid being hit the highest tax. The building is owned by a company solely owned by her, so she should be able to …

I really think you need to run this by a tax accountant before pulling the trigger on this plan. For one, income from a single residential rental property in a company will likely not be ABI. Therefore, the company shares will likely never qualify for the capital gains deduction. Second, the ta…

{This should be moved to a new topic.} << Thanks to whomever did so! That is not a plan that will pass an audit. Having the kids as shareholders doesn’t convert single-property income to Active Business Income. Nor will it pass the smell test if they “work” in the “business” to make it “Active”. …

I didn’t think it would be that easy, but looking at the other thread, didn’t it say common shares can be issued without looking at FMV because shares have no value. And the small company, didn’t hire anybody, so everyone in the family are helping with renovating and repair, didn’t get pay for anyt…

Owning shares doesn’t make you an employee, let alone a full-time employee. Common shares can be issued with “no value” but when there is existing value in the company, that value has to be allocated to another shareholder, such as in an “estate freeze” situation. You can’t bring in children as sh…

That’s where we can’t draw the line? On balance sheet, the property is only $300,000, I always think we have to use the market value too, maybe like the assessment which would be in $5M, to do any planning, so I was actually surprised when I see private company doesn’t have to look at value, and fo…

All those “full-time” employees for one building? If the purpose of hiring all these kids as employees is “not just doing for the purpose of becoming active” then what does your client gain by hiring all her kids? If operating the building truly required that many “employees”, wouldn’t your client…

Oh boy. This so illustrates the problem when people who don’t actually read law (or the Income Tax Act more particularly) come up with “ideas”. @arliss has it right LOL. Been in tax for over 40 years now and it never fails to amaze me. You can’t just make crap up and do it because you read someth…

LoL, I didn’t want to do that, that’s why it amazes me when I saw that post, thinking it would be possible, for company to do just that, we spent months looking into options. As for the full time employees exception, that’s only if they are truly doing it, like, instead of hiring a contractor to re…

Still GAAR and may other sections of actual law that would give a qualified professional accountant or a qualified professional tax lawyer reason to shake their heads in disbelief. She’s going to make MILLIONS and yet wants to nickel and dime by carelessly appropriating schemes from unqualified in…

Small residential rental

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Small residential rental

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