Surviving the CRA audit and best practices when claiming an ABIL

Mastering Personal Tax Returns

Introduction & Course Goals

Introduction to the Intermediate Masterclass on Personal Taxes - What we will be covering (7:53)
Methodical way to learn and understand tax - Compared to learning music and an instrument (4:53)
Administration - Course Payments, Refund policy, certificates of completion (6:25)
DOWNLOAD - PowerPoint Presentation file & PDF of slides
Understanding how you should use tax software to study and understand tax (10:40)
How to use tax software to study and understand certain problems and areas of difficulty to focus in on (7:44)
Using tax software to help you prepare prior year tax returns for clients who have not filed (7:36)

MODULE 1 - TAX RETURNS FOR FAMILIES - PRACTICAL CONSIDERATIONS

Introduction to family tax returns and what is covered in this module (3:57)

1.1 - Filing Joint Spouse Tax Returns - Taking Advantage of Tax Savings

Are there any benefits to filing as a couple/family? Income splitting? (5:03)
The types of income you can split between spouses (3:13)
Be consistent in claiming ownership percentages and don't change (5:22)
A review of the attribution rules and what it means in a real practice (6:17)
The benefits of combining donations and some of the issues you may run into (2:40)
Combining all medical on one spouse return but doing some analysis as well (3:36)
Example of the medical expense analysis and claiming on higher income spouse (4:29)
Analyze prior year medical expenses and returns for 12 month period (4:05)

1.2 - Dealing with families with children and claiming child care expenses

Introduction to families with children and what to expect (4:00)
The Canada Child Benefit as compared to previous monthly Child tax benefits (3:23)
Topics and discussions on the Child Care Expenses (3:08)
Some definitions relevant to child care expenses and common issues (4:07)
Eligibility for child care expenses and the reason they are incurred (3:27)
Understanding what earned income is for child care expenses (3:25)
Planning and issues to be aware of with owner-manager clients (6:10)
Process of claiming the child care expenses on the higher income (7:15)
Claiming child care expenses when there is joint custody (6:30)
Child care expenses when not in the country (4:55)
What child care expenses can be claimed - Issues to be aware of (10:16)

1.3 - Student Tax Returns - Frequently Encountered Issues

Introduction to student tax returns (4:09)
The importance of the T2202 as the focal point of a student return (3:59)
Tuition rule review to accurately prepare a student return (4:29)
Refresher on filling out Schedule 11 and transferring tuition credits (12:19)
Reporting amounts received as scholarships or grants on the tax return (3:59)
Example of a student with scholarships and bursaries how it affects tuition & transfers (3:30)
How are RESP payments received taxed and where do we report them? (3:00)
Reporting RESP income on the student's tax return - example of T4A (2:32)
Claiming the credit for interest paid on eligible student loans (2:19)
Examples showing how to claim interest on student loans (3:13)
Some questions and situations you will encounter (5:30)
What if the student didn't file in previous years and want to claim the credit this year? (4:05)
What if the student needed to take the job for their job/employment? (4:08)
Protecting yourself from bad situation with students (4:23)

1.4 - Tax Returns for Seniors - Not as Simple as You Think

Introduction to tax return preparation for seniors (2:48)
Sources of seniors' income and the typical T-slips you will encounter (6:00)
Tax issues and information on the CPP, OAS and GIS (4:46)
Pension income splitting for seniors and filing the T1032 form (5:08)
Example of a pension income splitting situation and how to do the planning (7:46)
Common tax credits applicable to seniors (5:50)
Eligibility for the DTC and the process for claiming in (5:22)
Example of the T2201 DTC credit form and CRA letter (5:01)
The OAS clawback calculations and how it works (8:09)
An example of the OAS and Age credit clawback calculations (6:05)
Some planning aspects to consider when working with seniors with high income (6:42)
Seniors and claiming the caregiver amount including living with children (3:05)
Example of the analysis that should be done in all of these situations (6:01)

MODULE 2 - TAX RETURNS FOR INVESTORS & INVESTMENT INCOME

Introduction to preparing tax returns for taxpayers with investments (4:03)

2.1 - Deducting interest expenses and management fees

The general rule for the deductibility of investment expenses (3:19)
The deductibility of management advisory fees as carrying charges (3:09)
Clearing up the confusion on management fees on mutual funds (5:11)
Deducting interest paid on investment loans (3:13)
Don't miss these carrying charges on your client files - T slip reporting (3:53)
Are tax preparation fees deductible as a carrying charge? (3:12)

2.2 - Tax & Investment Reporting Packages from Investment Advisors & Banks

The investment reporting package from advisors and self investing clients (4:45)
An example of an investment report you may receive from a client's advisors (4:21)
The problem of getting or calculating an accurate ACB for self-directed investors (5:58)

2.3 - Practical Applications of Reporting Capital Gains & Losses

Don't sweat the details when you file Schedule 3 for lots of transations (5:17)
What to expect from CRA when reporting capital gains and losses on Schedule 3 (6:08)
Make sure that Schedule 3 proceeds match trading summary T5008 (4:41)
Best practice - Keep a copy of trading summary and reporting package (2:28)
Business income or capital gains? The tax issue with day traders (4:11)

2.4 - Reporting Foreign Income & The Foreign Tax Credit (FTC)

Reporting foreign income and filing the T1135 Foreign Income Verification Statement (7:07)
Understanding when you need to file the T1135 (10:58)
Overview of the T1135 reporting requirements and what you need to know (8:13)
Frequently encountered situations and some common questions & oversights regarding SFP (6:30)
Example of the reports you will receive from the broker for foreign income (12:31)
Foreign tax credit framework and the frequently reviewed deduction - What to do and not do (8:26)

2.5 - Personal Use Property Rules (PUP) & Listed Personal Property (LPP)

Overview of the issues with Personal Use Property (3:45)
Personal Use and Listed Personal Property Rules (4:20)
Listed Personal Property and how it differs from PUP (2:50)
Examples showing how to calculate Personal Use Property (3:35)
Where the CRA can look into PUP rules and how them come up in an audit (5:43)

2.6 - UNDERSTANDING INVESTMENT SLIPS & COMMON TRAPS

Reporting investment income from slips and reports (6:33)
Reviewing capital gains and losses and avoiding common traps associated with T5008 (7:50)
TOSI - Tax on Split income and your responsibility as a personal tax preparer (9:17)

MODULE 3 - RENTAL INCOME & DEDUCTIONS

What we will be covering in this unit on rental and property income (3:42)

3.1 - GENERAL REPORTING FRAMEWORK & CLIENT DISCUSSIONS

Some rental properties will require GST/HST reporting - A summary of the rules (6:05)
Have a discussion with client on the rental property - lease, who pays expenses (6:21)
Reporting real estate disposition and what you have to examine when deciding between capital vs income (9:52)

3.2 - ISSUES ON REPORTING EXPENSES ON THE T776

Reporting issue - Reporting gross values on the T776 (2:17)
Have one accountant or bookkeeper prepare statement for all owners (3:58)
Comparison of current year expenses vs prior year for significant anomalies (5:05)
How do you report and deduct expenses incurred by only one partner? (4:42)
Common question on the deductibility of the owner's own labour on work (2:11)
Deducting vehicle, travel and other non-direct expenses on a rental statement (6:03)

3.3 - TIPS & TRAPS WHEN DEALING WITH LARGE EXPENSES & RENTAL LOSSES

Be wary of properties showing consistent losses - The REOP test (7:05)
Be aware of the pitfalls of rental properties with a personal element to them (5:17)
Dealing with renovations on rental properties and portion of your home (6:49)
Taking a look at rental income expenses - tips on what to look for and traps on deductions (13:08)
Capital cost allowance tips and traps - Makring the proper determination (8:53)
Court Case - Case with two properties where losses were denied by the courts (6:27)
Court Case - Case with limited income but large losses (5:48)

3.4 - DEALING WITH THE CRA ON RENTAL PROPERTIES

What you can expect from the CRA when you file rental income returns (4:00)
Be aware of the CRA's recent projects on reviewing the sale and reporting of any properties (8:09)
Some of the issues you may encounter with the CRA when clients sell properties (5:02)
Cases regarding property flips and something that is now very common (7:39)
More nonsense from CRA and their application of intention rules (4:10)
CRA auditors can often be illogical or unreasonable (9:01)

MODULE 4 - PRINCIPAL RESIDENCE EXEMPTION

Understanding the principal residence exemption on the T1 return - various scenarios (4:26)

4.1 - THE PRINCIPAL RESIDENCE EXEMPTION FORMULA

Overview of the principal residence exemption formula and the bonus year (6:15)
A common example of where the bonus can play a role in selling a property (5:31)
Scenario where the principal residence exemption was claimed on another property (8:05)

4.2 - CHANGE IN USE RULES & SECTION 45 ELECTIONS

Understanding the change in use rules and what it means for the PRE (5:09)
Rules and example examples of principal residence converted to a rental property (6:58)
Rules and example examples of a rental property converted to principal residence (6:40)
Budget changes introduced regarding section 45 and synopsis of approach (5:48)

MODULE 5 - BUSINESS INCOME & DEDUCTIONS REPORTING

Introduction to business income unit and a review of filing deadlines (5:25)
GST/HST filing requirements for individuals who have business income (4:34)
GST/HST filing deadlines for individuals with an annual reporting period (1:26)

5.1 - HOW TO SPOT CASH BUSINESSES & RELATED REPORTING ISSUES INCLUDING GST/HST

Overview of business income areas and GST/HST issues you may encounter encounter (6:37)
The importance of understanding your client-s business and effective T2125 reporting (6:58)
Accurately prepare the GST/HST return and make sure you review any reports filed by client (4:35)

5.2 - DEALING WITH CANADA PENSION PLAN (CPP) & EMPLOYMENT INSURANCE (EI)

Self employment and the EI and CPP rules (1:55)
Overview of the CPP rules for self-employed between 60 and 70 (4:36)
Filling out the Schedule 8 for those between 60 and 65 (8:42)
EI for self employed and opting into the system (4:48)
Registration process for those who have opted in (2:43)
Reporting EI premiums on the T1 return and payment of premiums (4:42)
Some considerations when advising on CPP premiums and EI opt-in (5:48)

5.3 - DEALING WITH THE BUSINESSES IN THE PLATFORM & GIG ECONOMY

General overview of the different segments of the platform economy (6:34)
Tax implications and reporting requirements for various platforms (9:21)
Understanding the GST/HST implications of the ride sharing platforms (6:05)
There is a difference between ride sharing and delivery service (4:58)
Understanding the tax and GST/HST requirements for rental accommodations (7:17)

5.4 - DEALING WITH PARTNERSHIPS & REPORTING PARTNERSHIP INCOME

Primer and issues related to partnership income (1:53)
What is partnership income and are there special rules to follow (5:16)
Other filing requirements for partners and filing the T5013 (7:48)
Some examples of partnership structures and corporate structures (6:57)
Filing T2125 business income for partnerships when only doing simple tax returns (10:38)
Complicating factors for partnership with difference between accounting and tax (6:44)
Partnership capital accounts and keeping track of partner draws (6:45)
Partner expenses and a different approach to accounting and tax reporting (11:37)

5.5 - UNDERSTANDING CAPITAL COST ALLOWANCE (CCA) ON VEHICLES

Capital Cost Allowance - Vehicles (2:34)
Review of the complexities with Class 10 and 10.1 (9:19)
Review of general rules and Class 10 vehicles (9:57)
Special CCA rules related to Class 10.1 (8:19)
Factoring GST/HST input tax credits into the mix (3:32)
Entering the proper information into tax software for accurate results (9:37)
Tip - Proper documentation and records for any vehicle additions (4:37)

6.1 - COMMON DEDUCTION & TAX CREDITS - TIPS & TRAPS

Claiming RRSP deductions properly and traps you should be aware of (8:24)
Spousal and child support payment - income and deductions (6:08)
Claiming personal tax credits for dependants on tax returns - Tips and Hacks (7:13)

6.2 - MEDICAL EXPENSES & UNDERSTANDING THE INTRICASIES

Medical expense tax credit overview and intricacies (1:19)
Summary of medical expenses and the rules (8:01)
Medical expenses for dependants and most common mistakes (7:43)
Putting medical expenses on the lower income is not a rule (3:55)
Often overlooked medical credit splitting especially among seniors (5:15)
Where to find information on what-s allowed as a medical expense (5:29)
Example of research using common questions and finding answers (4:52)
Two or more resources that will help you with medical expense research (4:04)
Sorting through the maze of medical expenses for nursing homes (14:19)

SECTION 6.3 - EMPLOYMENT EXPENSES & DEDUCTIONS

Employment expenses - T2200 and T777 (1:59)
Issues with the T2200 and common mistakes made (7:16)
Doing a critical overview of the T2200 before expenses (8:20)
Vehicle expenses where employee is allowed deduction (6:30)
Example of T2200 where no employment expenses are allowewd (8:21)
Commissioned salespeople and additional expenses (5:01)
Dealing with specific employment expenses (7:52)
Understanding the GST\HST rebates and the potential risks (8:41)

6.4 - ALLOWABLE BUSINESS INVESTMENT LOSSES (ABIL)

Overview of Allowable Business Loss rules and why they are challenging to claim (3:27)
General review of the ABIL rules - What the personal tax practitioner should know (6:44)
Common scenarios where there is the possibility of claiming an ABIL (6:40)
Claiming the ABIL on the T1 return and electing under Section 50-1 of the ITA (7:35)
Surviving the CRA audit and best practices when claiming an ABIL (9:40)

Concluding Remarks & Additional Resources

Conclusion - Next steps in your tax journey (6:31)

Surviving the CRA audit and best practices when claiming an ABIL

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