Apologies in advance ... this is lengthy and a little technical but it's a complex topic! Notwithstanding the recent weakening of the Canadian dollar, the decline in the value of US real estate may still present some attractive buying opportunities for Canadians.
The acquisition of US real estate by a Canadian resident not only has Canadian tax implications, but may also create US income, gift and estate tax consequences.
Merry Christmas and Best Wishes for the New Year!
What a year! I certainly don't recall a year as volatile and wild as the one that 2008 provided us. Overall, I would have to characterize it as a great year. How can you not when you are alive to breathe in the wonderful air, enjoy your family and friends, experience the natural beauty of our surroundings and enjoy our freedom. While 2008 also provided its share of volatility and financial tragedies, it also had many success stories.
By Paul R. LeBreux, LLB, LLM, TEP (friend of Moodys LLP and principal of Global Tax Law Professional Corporation)
It has been almost 10 years to the day that Canada's then Minister of Finance proposed new tax measures aimed at overhauling the method for taxing "non-resident trusts" and "foreign investment entities". These new tax measures were said to be needed to combat what the government had long perceived as an abuse of the Canadian tax system. Since the introduction of the controversial initiative, the implementation of the legislation has been delayed numerous times and the Draft Legislation has been released, each time with substantial amendments, no less than six times. Although the Draft Legislation continues to have an effective date of January 1, 2007, it would seem that the likelihood of these proposals being proclaimed as law has significantly diminished.
By Nicolas Baass, LL.B., LL.M. (Tax)
As a follow-up to our November 24, 2008 blog entry regarding tax planning during uncertain times, another tool that should be considered is the so-called estate "thaw" or "refreeze." As discussed in the November 24, 2008 entry, a freeze is a powerful succession planning tool. It could possibly be made even more potent by refreezing in these uncertain times.
Wow! What a bizarre time we have been living through recently. The stock markets have been extremely volatile. Bank failures. Large business failures. The price of oil has come down by two-thirds. Real estate values have declined. What next? If I only had the answer ....
Well, 'tis the Season! We are fast approaching December 31st, which is the end of the taxation year for all individuals and most trusts. Accordingly, much last minute tax planning will occur in order to ensure effective tax management. One of the most common tax planning techniques is to look at charitable donations (with gifts needing to be made on or prior to December 31, 2008 in order to be used as tax credits for individuals and most trusts for the 2008 taxation year).
