Accounting and Taxes Thread

[Shazam]

Declare the Republic of Fotze and set cap gains at 0%.

[Reggie28]

[QUOTE=accord1999;9492862]You don't have to pay but if your tax amount owing for the 2025 tax year is greater than $3000, then you'll pay interest/penalties.

If you pay the installments and owe less, do they pay you interest?

[Strange Brew]

Tax refunds don’t come with interest.

But if you under install and follow one of CRA’s allowable methods, you will not be charged interest or penalties.

[Strange Brew]

Originally Posted by fotze2

I didn’t mention this because I’m an idiot.

Tax mistakes do make you an idiot.

Bank stocks usually pay healthy dividend so that income should have been an obvious clue to your accountant. The dividends get reported to the government and your Dad would have received T-5’s for that.

[bizaro86]

Originally Posted by Reggie28

If you pay the installments and owe less, do they pay you interest?

Bahahahaha

[DoubleF]

Originally Posted by fotze2

Locke, we are gonna have to talk. That rhymes.

And also. ……. Fackkkkkkkkj

You have to pay taxes on it anyways. Sell it, pay taxes and transfer residual as cash vs the complexities on figuring out the paper work on what the transfer ACB is etc. when you sell later.

Depending on the situation, you could attempt to VDP to ask CRA if they're willing not to charge late interest and penalties.

Originally Posted by Mathgod

So is it a requirement to pay in advance or an option?

Requirement. Always has been. However, some people don't realize that the administration of that requirement is also shared with your employer.

Let's say your payroll remittances are typically high enough that every year, you have a little bit of a refund. Suddenly in one year, you sell some one off capital asset or investment that doesn't withhold during the year and you have a high tax bill vs other years. You'll get the calculation on tax instalments to prepay next year taxes when you file your T1. IF you don't pay those instalments AND there is a refund next year, no late interest and penalties are calculated after you file. However, IF you don't pay instalments AND there is a balance owing next year, then you pay late interest and penalties from the date you were supposed to pay instalments.

[DoubleF]

Originally Posted by Strange Brew

Tax refunds don’t come with interest.

But if you under install and follow one of CRA’s allowable methods, you will not be charged interest or penalties.

I believe a refund on filing doesn't come with interest. However, a withheld/delayed refund the CRA does give you some interest.

Originally Posted by Strange Brew

Did you file the tax return in year of death on your own? There are some tricky things when there is no spouse involved but it is all doable. The clearance certificate process is also DIY. And in truth, you don’t technically need a clearance certificate. It covers the executor’s butt in case of back taxes and also forces you to account for their investments.

Any tax accountant worth their salt would have e required you to list the investments held by the deceased at date of death.Important thing is to amend that return quickly. It sounds like the estate has taxes owing, and best to get that taken care of ASAP.

IMO, I do think that the CRA has made it unnecessarily difficult for executors and trustees to file Final/Estate tax returns for deceased. The authorization stuff that started this year is stupid and that's not including the slip calamity that happened this filing year. The amount of times I had clients saying the funeral home were helping with some stuff with CRA but had to re-send info 2-3+ times to get through was way too high (one said 5-6 times and that funeral home was livid the CRA was badly bungling something that had been done reasonably for years).

For many accountants, they ask what they normally do and if only a partial amount of info is received, there's only so much they can do. Especially since this year we couldn't look up slips to cross reference what is potentially out there. The biggest issue IMO is that many average taxpayers have no clue about the concept of a deemed disposition. Maybe in the future, there should be a system that you can link your SIN number to if you want and when you pass away, you should be able to have a trustee/executor send a death certificate to CRA to have institutions auto-register tax information on the MyCRA portal as at the date of death vs manually going through that process however many times. Eh... hopefully one day.

[Locke]

Originally Posted by DoubleF

I believe a refund on filing doesn't come with interest. However, a withheld/delayed refund the CRA does give you some interest.



IMO, I do think that the CRA has made it unnecessarily difficult for executors and trustees to file Final/Estate tax returns for deceased. The authorization stuff that started this year is stupid and that's not including the slip calamity that happened this filing year. The amount of times I had clients saying the funeral home were helping with some stuff with CRA but had to re-send info 2-3+ times to get through was way too high (one said 5-6 times and that funeral home was livid the CRA was badly bungling something that had been done reasonably for years).

For many accountants, they ask what they normally do and if only a partial amount of info is received, there's only so much they can do. Especially since this year we couldn't look up slips to cross reference what is potentially out there. The biggest issue IMO is that many average taxpayers have no clue about the concept of a deemed disposition. Maybe in the future, there should be a system that you can link your SIN number to if you want and when you pass away, you should be able to have a trustee/executor send a death certificate to CRA to have institutions auto-register tax information on the MyCRA portal as at the date of death vs manually going through that process however many times. Eh... hopefully one day.

Ugh...you're giving me PTSD from last filing season....

That was an unmitigated disaster.

[DoubleF]

Originally Posted by Locke

Ugh...you're giving me PTSD from last filing season....

That was an unmitigated disaster.

Disaster? No. It was a full blown calamity because it was brought down by a combination of idiotic decisions made by CRA and not some random act of god thing that was out of their hands.

[Locke]

Originally Posted by DoubleF

Disaster? No. It was a full blown calamity because it was brought down by a combination of idiotic decisions made by CRA and not some random act of god thing that was out of their hands.

And I have no idea what hell awaits us from their stupidity next filing season.

[DoubleF]

Originally Posted by Locke

And I have no idea what hell awaits us from their stupidity next filing season.

I thought last year was the worst they could have done... little did I know it could go from, "Hold my beer." to "Hold my mickey."

[Locke]

Originally Posted by DoubleF

I thought last year was the worst they could have done... little did I know it could go from, "Hold my beer." to "Hold my mickey."

Someone seriously needs their ass kicked.

Take the head of CRA and ship him to Iqaluit to do Assessments.

[DoubleF]

Originally Posted by Locke

Someone seriously needs their ass kicked.

Take the head of CRA and ship him to Iqaluit to do Assessments.

I honestly think that's part of the issue. The older guard around 5 years ago was trying to make it so that it would work for the CRA and taxpayers at the same time. They were trying to educate and proceed forward. However, I think most of them are gone now and it's a new guard with new mandate that thinks that all taxpayers are intentionally trying to pay less taxes than they are supposed to and are getting really aggressive about it. They're also punching through more stuff that is completely broken vs well tested before deployment.

I've basically been saying, "We've had idiot CRA, we've had vicious CRA. In the last few years, this is the first time we've had CRA behaving as a vicious idiot."

[Strange Brew]

Originally Posted by DoubleF

I believe a refund on filing doesn't come with interest. However, a withheld/delayed refund the CRA does give you some interest.



IMO, I do think that the CRA has made it unnecessarily difficult for executors and trustees to file Final/Estate tax returns for deceased. The authorization stuff that started this year is stupid and that's not including the slip calamity that happened this filing year. The amount of times I had clients saying the funeral home were helping with some stuff with CRA but had to re-send info 2-3+ times to get through was way too high (one said 5-6 times and that funeral home was livid the CRA was badly bungling something that had been done reasonably for years).

For many accountants, they ask what they normally do and if only a partial amount of info is received, there's only so much they can do. Especially since this year we couldn't look up slips to cross reference what is potentially out there. The biggest issue IMO is that many average taxpayers have no clue about the concept of a deemed disposition. Maybe in the future, there should be a system that you can link your SIN number to if you want and when you pass away, you should be able to have a trustee/executor send a death certificate to CRA to have institutions auto-register tax information on the MyCRA portal as at the date of death vs manually going through that process however many times. Eh... hopefully one day.

Well I'm going to push back on the deemed disposition rules a bit. It's certainly within the realm of the tax accountant to ask if the deceased held any investments and to explain the deemed disposition rules. That is fairly basic intake procedure and I am not a tax accountant by any stretch. That is probably the single biggest tax rule that affects returns for estates and your accountant should be highlighting that.

Also an examination of prior year returns should show dividend income.

But no disagreement on the bureaucracy and administrative headaches on dealing with CRA for an estate.

And you're right, they will pay you interest on a refund if there is a delay on their end. But not because you over-install or have too much withheld.

[DoubleF]

Originally Posted by Strange Brew

Well I'm going to push back on the deemed disposition rules a bit. It's certainly within the realm of the tax accountant to ask if the deceased held any investments and to explain the deemed disposition rules. That is fairly basic intake procedure and I am not a tax accountant by any stretch. That is probably the single biggest tax rule that affects returns for estates and your accountant should be highlighting that.

Also an examination of prior year returns should show dividend income.

But no disagreement on the bureaucracy and administrative headaches on dealing with CRA for an estate.

And you're right, they will pay you interest on a refund if there is a delay on their end. But not because you over-install or have too much withheld.

I could be wrong, but my understanding of the situation is that investment info was provided for the final return but this was just a small batch of the investing information that was missed? When the Computershare holdings thing was mentioned, that was my assumption because I've seen the same scenario a few times before because those types of holdings don't always end up showing on some type of readily available/accessible statement.

But completely fair points if my understanding is mistaken.

[fotze2]

Originally Posted by Strange Brew

Tax mistakes do make you an idiot.

Bank stocks usually pay healthy dividend so that income should have been an obvious clue to your accountant. The dividends get reported to the government and your Dad would have received T-5’s for that.

I always pay on the dividend, just didn't know the deemed sale part.

[Strange Brew]

Originally Posted by DoubleF

I could be wrong, but my understanding of the situation is that investment info was provided for the final return but this was just a small batch of the investing information that was missed? When the Computershare holdings thing was mentioned, that was my assumption because I've seen the same scenario a few times before because those types of holdings don't always end up showing on some type of readily available/accessible statement.

But completely fair points if my understanding is mistaken.

Originally Posted by fotze2

I always pay on the dividend, just didn't know the deemed sale part.

Sounds like the poster just didn't know about the deemed disposition rule so seems unlikely that some investments were included while others were not.

I'm surprised if the dividends were included on the final tax return that the deemed disposition rule was not raised by CRA either upon review. This isn't my thing really but just seems rather obvious in that scenario.

Good luck in getting this fixed Fotze. If it was me, I wouldn't let much time pass before amending the return.

[DoubleF]

Originally Posted by Strange Brew

Sounds like the poster just didn't know about the deemed disposition rule so seems unlikely that some investments were included while others were not.

I'm surprised if the dividends were included on the final tax return that the deemed disposition rule was not raised by CRA either upon review. This isn't my thing really but just seems rather obvious in that scenario.

Good luck in getting this fixed Fotze. If it was me, I wouldn't let much time pass before amending the return.

CRA takes up to 3 years to suddenly realize something should be looked at if it's straight forward. Because there's potentially the option not to deem dispose as of death and instead as of actual on an estate, the situation can get muddled.

The other issue is that there are scenarios where there is no deemed disposition. I believe that the deemed disposition rule is kicking in in this scenario because of perceived attempts at wrapping up the estate on the T1 Final vs allowing the assets to go into an estate/T3 trust scenario where they will be disposed of there (deemed or actual) instead.

Computershare scenario wise, it being missed happens a lot. Clients receive a T slip, but may only receive an annual statement on the side, and/or may have to do special instruction to get the shares disposed. These shares may not be on the primary investment statement with the other investments. I've seen many different scenarios. Sometimes, it's that the taxpayer had some held in trust under Computershare and a bunch in an investment account. The trustee/executor didn't realize they were separate batches.

The last facet is human. Someone may assume a situation when preparing the return, especially when it's high octane and we're churning through many different returns simultaneously. Trustee/executor are under duress and not really thinking super clearly. This is why it's probably easier to notice/becomes more obvious when sitting down in a lower pressure environment and slowing going through the clearance certificate request process/actually able to sit down and read statements and documents line by line vs skimming.

Owning shares of another company under Computershare can be weird. Your points are very valid. I'm just saying that the Computershare scenario is also easy to misinterpret/mistakes as well, because it's not as always clean and as straight forward as all other investment holding scenarios.

[Fuzzy14]

Happy News (heavy sarcasm), it looks like bare trust filings will be coming in for 2025.

[Locke]

Originally Posted by Fuzzy14

Happy News (heavy sarcasm), it looks like bare trust filings will be coming in for 2025.

While at the same time CRA cant handle the #### thats on their plate already.