Comments on: The Income Splitting Rules http://blog.taxresource.ca/what-are-the-canadian-income-splitting-rules/ Canadian Tax Help & Financial Planning Resources Mon, 15 Mar 2010 19:24:59 -0500 http://wordpress.org/?v=2.9.1 hourly 1 By: Tax Guy http://blog.taxresource.ca/what-are-the-canadian-income-splitting-rules/comment-page-1/#comment-2788 Tax Guy Sat, 27 Jun 2009 01:37:53 +0000 http://blog.taxresource.ca/?p=353#comment-2788 @ Joe: If your spouse invests the money you have lent, then the tax will be on the investment income and not the loan. In your example above, you make $100k and lend $50k to your spouse, you still pay tax on $100,000. If you lent your spouse $50,000 and took back a promissory note with a stated interest rate at the prescribed rate, then you must declare the interest you receive from your spouse from the note (x% of $50k). Your spouse invests the $50,000 and is taxed on the investment income from that $50k and will also be able to deduct the interest paid to you. @ Joe:

If your spouse invests the money you have lent, then the tax will be on the investment income and not the loan. In your example above, you make $100k and lend $50k to your spouse, you still pay tax on $100,000.

If you lent your spouse $50,000 and took back a promissory note with a stated interest rate at the prescribed rate, then you must declare the interest you receive from your spouse from the note (x% of $50k). Your spouse invests the $50,000 and is taxed on the investment income from that $50k and will also be able to deduct the interest paid to you.

]]> By: Joe http://blog.taxresource.ca/what-are-the-canadian-income-splitting-rules/comment-page-1/#comment-2786 Joe Fri, 26 Jun 2009 17:52:28 +0000 http://blog.taxresource.ca/?p=353#comment-2786 Hello, Tax Guy: For the income split, I have a question about how it works: assume that my annual income of $100k, my spause stays home without income. I lend her $50k for investment. When filling tax return form, should I claim my income as $50k + the interest from my lending money to my spause, or I still have to report $100k? Thanks for your help. Regards, Joe Hello, Tax Guy:

For the income split, I have a question about how it works: assume that my annual income of $100k, my spause stays home without income. I lend her $50k for investment. When filling tax return form, should I claim my income as $50k + the interest from my lending money to my spause, or I still have to report $100k?

Thanks for your help.

Regards,

Joe

]]> By: Tax Guy http://blog.taxresource.ca/what-are-the-canadian-income-splitting-rules/comment-page-1/#comment-2602 Tax Guy Tue, 26 May 2009 14:39:33 +0000 http://blog.taxresource.ca/?p=353#comment-2602 The attribution rules under the Income Tax Act, subsection 74.2(1) do not apply if the transferor was not a resident of Canada. However, at the point the where the transferor becomes a resident of Canada, the attribution rules may apply. The facts are generally outlined in a 1999 technical interpretation bulletin. If you have access to CRA technical interpretation bulletins, the document number is 1999-0013435 (E). The attribution rules under the Income Tax Act, subsection 74.2(1) do not apply if the transferor was not a resident of Canada. However, at the point the where the transferor becomes a resident of Canada, the attribution rules may apply. The facts are generally outlined in a 1999 technical interpretation bulletin. If you have access to CRA technical interpretation bulletins, the document number is 1999-0013435 (E).

]]> By: Kirby http://blog.taxresource.ca/what-are-the-canadian-income-splitting-rules/comment-page-1/#comment-2600 Kirby Tue, 26 May 2009 09:50:20 +0000 http://blog.taxresource.ca/?p=353#comment-2600 Assume a non-resident couple where the non-working spouse takes ownership of money that is earned while non-resident. Would attribtuion rules apply on the income after becoming residents in the future. Seems most Canadians ignore it and there hasn't been any tax court cases that I can find. Assume a non-resident couple where the non-working spouse takes ownership of money that is earned while non-resident. Would attribtuion rules apply on the income after becoming residents in the future. Seems most Canadians ignore it and there hasn’t been any tax court cases that I can find.

]]> By: Are Gifts & Inheritances Taxed In Canada? http://blog.taxresource.ca/what-are-the-canadian-income-splitting-rules/comment-page-1/#comment-207 Are Gifts & Inheritances Taxed In Canada? Fri, 22 Aug 2008 13:37:01 +0000 http://blog.taxresource.ca/?p=353#comment-207 [...] generated from gifts to your children or spouse may be taxed in your hands. See our article on the Canadian Income Splitting Rules and Income Splitting [...] [...] generated from gifts to your children or spouse may be taxed in your hands. See our article on the Canadian Income Splitting Rules and Income Splitting [...]

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