TAX PLANNING FROM THE KNOWLEDGE BUREAU
By Evelyn Jacks
Did you know that the CRA’s
Voluntary Disclosures Program (VDP) is proposed to change soon, restricting the ability to correct errors
and omissions within a 10-year period? What can be done now to avoid the
serious cost implications for taxpayers who have made errors or omissions
on previous tax returns?
Should the changes come to fruition, not only will taxpayers lose the
opportunity for full relief on interest and penalties owing, but a
prepayment of taxes owing may also be required.
If you think you may need to make adjustments to previous years’ returns,
Be sure to talk to your tax advisor to see if you should request an
adjustment to tax years 2007 to 2016 before December 31, 2017, especially
if you have missed reporting capital losses or principal residence
dispositions or failed to file lucrative deductions for the following:
moving expenses; child care expenses; business investment losses; carrying
charges; or tax shelter deductions.
Use the following checklists to discuss common misses in filing prior
returns with your advisor:
ERRORS OR OMISSIONS IN REPORTING INCOME
* Reporting income from joint accounts.
* Missed interest or dividends from private investments.
* Missed income from life insurance policy transfers.
* Missed income or expenses on portfolio statements.
* Errors in calculating adjusted cost base of mutual funds and other
* Errors in reporting rental income – especially on restorations and
* Missed reporting of personal residence dispositions.
* Errors in reporting foreign currency exchange transactions and filing of
T1135 forms to report offshore assets.
* Carrying charges including deductible investment counsel and safekeeping
* Safety deposit box fees (2007-2013).
* Missed Exploration & Development expenses.
* Errors in claiming flow- through tax shelters.
* Missed application of allowable business investment losses on inactive or
bankrupt private corporations.
* Missed reporting of capital losses.
* Errors in reporting net partnership losses
MISSED TAX CREDITS
* Donations: make charitable gifts through will to maximize refunds.
* Transfer securities to charity or private foundations to avoid taxes on
* Give life insurance, but recognize excess of fair market value over cost
* Net income limit is 100% on gifts of ecologically sensitive property,
certified cultural property and recapture of CCA.
* AMT – Alternative Minimum Taxes previously paid.
Evelyn Jacks is the founder and President of Knowledge Bureau. This
originally appeared in the
Knowledge Bureau Report, © 2017 The Knowledge Bureau, Inc. Reprinted with permission. All
rights reserved. Follow Evelyn Jacks on Twitter
@EvelynJacks. Visit her blog at www.evelynjacks.com.
Her latest book,
Family Tax Essentials, is now available.
Notes and Disclaimer
©2017 by Fund Library. All rights reserved.
The foregoing is for general information purposes only and is the opinion
of the writer. No guarantee of investment performance is made or implied.
It is not intended to provide specific personalized advice including,
without limitation, investment, financial, legal, accounting or tax advice.