What is a Section 85 rollover?
A Section 85 rollover is a provision of the Income Tax Act that allows eligible property to be transferred to a corporation […]
What is Scientific Research and Experimental Development (SR&ED)?
SR&ED is the CRA’s tax incentive program that provides credits and deductions for eligible research and development expenditures, one of the most […]
What is the difference between salary and dividends?
Salary is employment income paid to the owner-employee and is deductible to the corporation; dividends are distributions of after-tax corporate profit to […]
What is a Qualified Small Business Corporation (QSBC)?
A QSBC is a Canadian-Controlled Private Corporation that meets specific CRA tests at the time of a share sale, and qualifying is […]
What is a Prescribed Rate Loan?
A prescribed rate loan is a loan from a higher-income spouse or family member to a lower-income one at the CRA’s published […]
What is a Personal Services Business?
A personal services business is a corporation the CRA treats as a disguised employment relationship, typically an incorporated contractor providing services to […]
What is the difference between Permanent and Term Life Insurance?
Term life insurance provides coverage for a fixed period at a lower premium; permanent life insurance provides lifetime coverage and can accumulate […]
What is Passive Income?
Passive income is investment income earned inside a corporation, interest, rental income, and taxable capital gains, that does not qualify for the […]
What is Owner Compensation Planning?
Owner compensation planning is the deliberate design of how income is extracted from a corporation, balancing salary, dividends, and other strategies to […]
What is a Non-Arm’s Length Transaction?
A non-arm’s length transaction is a deal between related parties, family members, a shareholder and a corporation, or entities under common control, […]
What is the Lifetime Capital Gains Exemption (LCGE)?
The LCGE is a federal exemption that allows eligible Canadian business owners to shelter a significant portion of capital gains on the […]
What are Instalment Penalties?
Instalment penalties are interest charges the CRA imposes when required tax instalments are paid late, short, or not at all, calculated from […]