LawyerSelect.ca - Tax Law Blog

CRA Launches Investigation into "Shadow Flipping" of Toronto Condos This blog is brought to you by LawyerSelect.ca  - Free Personalized Lawyer Referral Service Pretty much everybody knows about the booming real estate markets in Toronto and Vancouver. Fear of an overly inflated market is everywhere, and in response, governments at all levels are taking action in one form or another. The latest government agency to throw their hat into the regulatory ring is none other than the Canada Revenue Agency, or CRA for short. They’re particularly interested in scrutinizing the practice known as “shadow flipping” or “assignment sales.” Essentially, this is a real estate sales technique that involves purchasing pre-construction condos directly from a developer, and a subsequent sale to another buyer at a higher price, even before the seller takes possession of the condo. What happens is the first purchaser of the condo transfers or sells his/her interest in the real prope...

Canada’s New Tax Laws: Changes To The Taxation of Private Corporations This blog has been brought to you by LawyerSelect.ca This past July, the federal Liberal government proposed some major changes to the taxation of private corporations. These proposals, if enacted by Parliament, are likely to affect the majority of Canadian business owners who carry on business through a private corporation. Income Splitting – It’s become very commonplace in Canadian tax planning for owners of private corporations to include their family members as part-owners . The basic structure is: family members hold shares in the corporation, either directly or through a family trust. Typically, family members hold different classes of shares, which basically allows for a dividend to be paid to the different family members at the sole discretion of the corporation’s directors or other officers. Structuring in such a way allows for dividends to be paid to family members who are in a lower ta...