Practical tips on ID page

• Roll-forward the prior year tax return

• Copy the information from last year tax return

• Have client complete the questionnaire

• Double check the cosmetic items on ID page (name, title, address, authorized person)

• You can print tax return in French and English

• Province of taxation = Multiple jurisdictions (Schedule 5)

Practical tips on ID page

CRA Guide

Advanced topics

Determination of residency: https://htkacademy.com/residency-of-corporations/

Acquisition of control: https://htkacademy.com/acquisition-of-control-aoc-rules/

Amalgamation: https://htkacademy.com/section-87-rollover-amalgamations/

Wind-up: https://htkacademy.com/section-881-rollover-winding-up-of-a-subsidiary/

Practical tips on schedule 1

• Go through Schedule 1 of the prior year file

• Learn about different types of adjustments: https://htkacademy.com/income-or-loss-from-a-business/

• CRA Tax Guide Available

Practical tips on schedule 3

•Dividends received

Be aware of if it is from Connected or Non-Connected Corporation.

Connected Corporation: No Part IV tax, unless the paying corporation receives a Part IV refund on payment of the dividend.

Non-Connected Corporation: Part IV tax

Link for more readings: https://htkacademy.com/refundable-taxes-part-i-refundable-tax-part-iv-refundable-tax-refundable-dividend-tax-on-hand-rdtoh-dividend-refund/

Practical tips on schedule 3

•Dividends Paid1. Capital Dividend Account

2. Eligible Dividend – GRIP balance needed for CCPCs

3. Non-Eligible Dividend - LRIP balance needed by non-CCPCs

https://htkacademy.com/capital-dividend-account-cda/

https://htkacademy.com/general-rate-income-pool-grip-canadian-controlled-private-corporation-ccpc/

https://htkacademy.com/lower-rate-income-pool-lrip-non-canadian-controlled-private-corporation-non-ccpc/

Practical tips on schedule 3

• If you pay CDA dividend, you need to check schedule 89 balance, file T2054 election.

• You need board of directors resolution before giving CDA dividend.

• Directors resolution required for Eligible dividends

• For eligible dividends, a corporation must notify shareholders that an eligible dividend is being paid.

Practical tips on schedule 6

• HTK Documents:

https://htkacademy.com/capital-gains-and-losses/

Advanced topics:

https://htkacademy.com/replacement-property-rules/

https://htkacademy.com/allowable-business-investment-losses-abil/

https://htkacademy.com/business-income-vs-capital-gains/

https://htkacademy.com/disposal-of-land-and-adjacent-building/

Practical tips on schedule 7

• Read about property incomehttps://htkacademy.com/income-from-property-interest-dividends-rent-and-royalties/

• Read about Part I refundable taxhttps://htkacademy.com/refundable-taxes-part-i-refundable-tax-part-iv-refundable-tax-refundable-dividend-tax-on-hand-rdtoh-dividend-refund/

• Understand tax rateshttps://htkacademy.com/federal-taxes-payable-calculation-provincial-abatement-small-business-deduction-additional-refundable-taxes-mp-deduction-general-rate-reduction/

Practical tips on schedule 8

• Understanding CCAhttps://htkacademy.com/capital-cost-allowance-for-depreciable-capital-assets/

• CCA Classes & Rates https://htkacademy.com/cca-classes-rates/

CRA Website with more rateshttps://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance/classes.html

Schedule 10 – Post 2017 Changes

• Not CEC anymore – It is now class 14.1 on schedule 8

• https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/eligible-capital-expenditures.html

Schedule 5

• Most commonly prepared when company has permanent establishment in multiple provinces.

• CRA guidance on schedule 5

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/provincial-territorial-corporation-tax/you-have-complete-schedule-5.html

Schedule 9 & 23

• Associated Corporations disclosure on Schedule 9

• Schedule 23 – used to allocate small business deduction

HTK notes:

https://htkacademy.com/associated-corporations-and-implications/

Schedule 25 & T1134

If a Canadian corporation has a foreign affiliate or controlled foreign affiliate outside of Canada.

CRA guidance on T1134

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/information-returns-relating-foreign-affiliates.html

T1135

If a Canadian corporation has specified property outside of Canada. • Canadian resident individuals, corporations, and certain trusts that, at any

time during the year, own specified foreign property costing more than $100,000

CRA guidance on T1135

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/foreign-income-verification-statement.html

T106

• Information Return of Non-Arm's Length Transactions with Non-Residents

Only needs to be filed if overall transactions with non-residents, non-arm’s length persons are over $1,000,000.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/competent-authority-agreements-notices/form-t106-information-return-non-arms-length-transactions-non-residents-minimis-policy.html

Schedule 88

• Business activities

Administrative matters – Obtaining E-file number• https://www.canada.ca/en/revenue-agency/services/e-services/e-

services-businesses/efile-electronic-filers/apply-efile.html

Penalties and interest (filings & Instalments)

• https://htkacademy.com/deadlines-installments-interest-and-penalties-2/

Statue Barred

Normal reassessment period

CRA can usually reassess a return for a tax year:

■ within three years of the date we sent the original notice of assessment for the tax year, if the corporation was a CCPC at the end of the year; or

■ within four years of the date we sent the original notice of assessment for the tax year, if the corporation was not a CCPC at the end of the year.

Statue BarredExtended reassessment period

The normal reassessment period can be extended for an extra three years for any of the following reasons:

■ if you want to carry back a loss or credit from a later tax year;

■ when a non-arm’s length transaction involving the corporation and a non-resident affects the corporation’s tax;

■ if the corporation pays an amount or receives a refund of foreign income or profits tax;

■ when a reassessment of another taxpayer’s tax for any of the above reasons affects the corporation’s tax;

■ if a reassessment of another tax year (it must be a prior tax year if the reassessment relates to a loss or credit carryback) for any of the above reasons affects the corporation’s tax;

■ if the reassessment results from a non-resident corporation’s allocation of revenue or expenses for the Canadian business or from a notional transaction, such as “branch advance,” between the non-resident corporation and its Canadian business; or

■ to give effect to the application of the non-resident trust rules in section 94 or to the application of the foreign investment rules under sections 94.1 and 94.2. If the reassessment results from a provincial income reallocation, the normal reassessment period can be extended for one year from the later of:

■ the day on which the CRA is advised of the provincial reassessment; and

■ 90 days after the notice of the provincial reassessment was mailed.

Statue Barred

Unlimited reassessment period

CRA can reassess a return at any time if:

■ the corporation has made a misrepresentation because of neglect, carelessness, wilful default, or fraud in either filing the return or supplying information required by the Income Tax Act;

■ the corporation filed Form T2029, Waiver in Respect of the Normal Reassessment Period or Extended Reassessment Period, with a tax services office before the normal reassessment period expires. The waiver can be filed up to three more years after the end of the normal reassessment period if the waiver applies to one of the situations previously described under “Extended reassessment period”;

■ the reassessment is to carry back losses or certain tax credits and deductions where a prescribed form requesting the amendment has been filed on time; or

■ a court instructs us to reassess. Note If you want to revoke a waiver that was previously filed to extend the normal reassessment period for a certain tax year, file Form T652, Notice of Revocation of Waiver, at your tax services office. The revocation will take effect six months after you file Form T652.

Keeping records

Keep your paper and electronic records for a period of six years from the end of the last tax year to which they relate. If you file your income tax return late, keep your records for six years from the date you file your return.

Certain records must be kept longer. These include minute books, which have to be kept until sometime after dissolution. However, if you want to destroy your records early, complete Form T137, Request for Destruction of Records.

Using HTK Academy website for research

• https://htkacademy.com/it-bulletins-and-folio-views-by-ita-section/

Other ways to do research

• Google with CRA