What is going on with us?
As we approach the 2024 tax season, we find ourselves navigating a landscape of unprecedented change. Yet again, the federal government’s last-minute alterations have undermined taxpayers’ ability to plan and prepare. Over the past year, the capital gain rate adjustments were deferred until January 1, 2026—and possibly beyond—while bare trust reporting was eliminated for 2024, a step long advocated by CPA Canada. Unfortunately, this is just the latest in a series of government missteps since 2016, further complicating our efforts to look ahead. The looming election—expected anytime between now and the end of the year—may bring even more upheaval, making future tax planning all the more challenging.
While we continue to maintain our Downtown Vancouver office (#602-570 Granville Street) we have opened an office in Edmonton (#209-10471 178th Street), however many of our team members are embracing the flexibility of remote work. Rest assured, we are still available for face-to-face discussions, but please schedule in advance. If you require an in-person meeting, simply reach out to your Partner, and we will arrange it.
Partial Filing/Payment Extension for Certain Taxpayers ; Potential Delay in receiving tax slips
Due to the Federal Government’s back and forth on the capital gains rules there has been a change for ‘impacted’ taxpayers filing deadlines.
What’s New in Personal Tax?
The proposed increase the capital gains inclusion rate has been deferred and will not be effective as of June 25, 2024. The increase is now proposed to take effect on January 1, 2026, if it is enacted by parliament. For the 2024 tax year, the inclusion rate remains at 50% - see here for more info
If you had a short term rental and did not comply with the municipal/province rules you will no longer be able to claim deductions. Hosts were required to comply with these applicable provincial and municipal registration, permit, license, and operating requirements by December 31, 2024. If you you did not comply in 2024 ensure you comply asap in 2025 to get deductions for 2025.
Perhaps the most significant back door tax increase has been a change to the Alternative Minimum Tax rules for 2024. The minimum tax rate has increased from 15% to 20.5%, however the basic exemption from AMT has now moved up to the fourth income tax bracket (173,205 in 2024). The inclusion rate for taxable capital gains, allowable capital losses, and gains from listed personal property has risen to 100%, up from 80%. This also applies to trusts, while allowable business investment losses remain at a 50% inclusion rate. Donations of publicly listed securities to qualified donees now have a 30% inclusion rate for AMT purposes. At the same time deductions for AMT income are limited, with some increased by a factor of 7/5, and others, like stock options, no longer available. Loss carryforwards are restricted: non-capital and limited partnership losses can only be used at 50% of their amounts, and capital loss carryforwards are reduced to a 50% inclusion rate (which is ridiculous as the capital gains are included at 100%). Additionally, only 50% of interest and financing expenses for borrowed amounts to earn income from property can be deducted for AMT purposes. These changes aim to increase AMT liability for high-income individuals and limit excessive tax benefit reductions.
The Home Buyer’s Plan withdrawal limit has increased from $35,000 to $60,000 for withdrawals made after April 16, 2024. Temporary repayment relief was also introduced to defer the start of the 15-year repayment period by an additional three years for participants making a first withdrawal between January 1, 2022, and December 31, 2025. Accordingly, the 15-year repayment period will start in the fifth year following the year that the first withdrawal was made.
If you make money on a digital platform, make sure you are reporting as starting with the 2024 calendar year, reporting platform operators are now required to collect and report information on sellers using their platform to sell goods or provide certain services, such as the rental of real or immovable property. If you are a reportable seller, your reporting platform operator will provide you with an annual copy of the information that is collected and reported to the CRA under these rules by January 31, 2025, to help you file your taxes.
The Volunteer firefighters’ tax credit value increased from $450 to $900.
As we enter another demanding tax season, our commitment to navigating these changes together remains unwavering. Here's to a successful season ahead. See you soon.
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