How To Ensure Rental Income Within Your Corporation is Active Business Income
How To Ensure Rental Income Within Your Corporation is Active Business Income May 5, 2023 Tax Question: How do you ensure your rental income within
May 5, 2023
Tax Question:
What do all of those numbered forms and schedules that make up a tax return do? Why do we need them? Can it be simplified?
Facts:
Canadian tax returns are a collection of calculations. Some calculations are for deductions. Others are for calculating profits. Still, others are for calculating the tax on those profits. And most importantly to some entrepreneurs, others are for tax credits including those refundable credits we like so much. The tax forms and schedules calculate and track these different items.
There are different types of tax returns for different types of taxpayers. The system actually has structure and makes some sense to even non-accountants. For example the:
After that, the system becomes more complicated but there is still structure. This week begins a series on the forms and schedules that make up a corporate tax return. For corporate taxes, the same T2 but with different attachments is used by all corporations in Canada for their federal taxes. Even non-residents use the T2 to file taxes. The only exception is that some provinces, like Alberta, have their own provincial equivalent of the T2 but even then the forms are largely consistent with the Federal tax forms.
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Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.
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