Red Ink on the Prairies

A day after Quebec’s Finance Minister Eric Girard brought down a Budget featuring a $6.3 Billion deficit, Saskatchewan’s Finance Minister Jim Reiter tabled his government’s budget on March 19. Next up was Finance Minister Adrian Salas, who tabled the Manitoba Budget on March 24. The common thread: there’s lots of red ink on the Prairies. But that’s where the budget documents differ between Manitoba and Saskatchewan. Here’s the latest tax news and why it matters to the advice you give your clients.

Residents of Canada must file tax returns to report world income in Canadian funds. That means taxpayers will need to gather documentation to report offshore earnings — and new for 2013, more specific information about income earned by offshore assets with a cost of $100,000 or more.

Retirement planning may begin for you–quite unexpectedly–with the receipt of a retiring allowance or severance package from your employer.  

Year-end is charitable giving time, but remembering to verify the tax status of any organization that you intend to donate a considerable sum to is very important as not all benevolent oriented organizations will allow a tax credit under the Income Tax Act. Last month, a hopeless appeal was lost in the Tax Court of Canada, for example.  

If a surviving spouse or common-law partner is designated as a successor holder of the TFSA either in the TFSA contract or in the deceased taxpayer’s will, the successor becomes the owner of the TFSA.

With the Senate scandal dominating the news, the issue of what is a principal residence for tax purposes seems an appropriate question.

Where a taxpayer has disposed of a capital property and a portion of the proceeds is receivable after the end of the taxation year, the taxpayer may claim a reasonable capital gain reserve for the funds not yet received.