For many individuals preparing their Canadian income tax returns, the term “taxable Canadian property” is probably recognizable. In fact, numerous provisions within the Income Tax Act impose tax implications regarding the disposition of this property on certain individuals, such as non-residents. As such, it is very important for Canadian taxpayers to be aware of the proper definition of taxable Canadian property, and how it affects them.
Section 248(1) of the Income Tax outlines the majority of property that is considered taxable Canadian proper. These items include the following:
- Real or immovable property situated in Canada
- Certain property used or held in eligible capital property in respect of a business carried on in Canada
- If the taxpayer is an insurer, its designated insurance property for the year
- Shares of the capital stock of a corporation that is not listed on a designated stock exchange, an interest in a partnership or an interest in a trust, if certain additional conditions apply
- Shares of the capital stock of a corporation that is listed on a designated stock exchange, a share of the capital stock of a mutual fund corporation or a unit of a mutual fund trust, if certain additional conditions apply
- An option, interest or right in a property described in the bullet points above
- A Canadian resource property
- An income interest in a trust resident in Canada
- A right to a share of the income or loss under certain agreements
- A life insurance policy in Canada
The tax accountants at Tax Doctors Canada have helped non-residents and other Canadian taxpayers understand their financial responsibilities regarding this property, and in the process, minimized the amount of tax they were required to pay. Tax Doctors Canada would welcome an opportunity to assist you with all of your tax accounting and tax planning needs.
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Tax Doctors Canada has 3 office locations (by appointment only) in Toronto, Markham and Mississauga to serve you. You can also have one of our certified tax accountants assist you with your personal tax return requirements remotely from the comfort of your home utilizing Tax Doctors Canada's secure document transfer portal. We accept clients from Canada and worldwide.