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With COVID-19’s effect on market conditions, now could be a great time to review your investment portfolio to identify tax planning opportunities, such as tax loss selling.  In this article, we’ll discuss how tax loss selling works and how to ensure losses you do trigger can be claimed as intended. 

With the end of the year fast approaching, Canadian taxpayers will want to consider all the tax planning opportunities available to them.  Which year-end planning strategies apply to you will depend upon your specific circumstances and objectives.  The IG Wealth Management Year-end Tax Planning Checklist can help you understand what opportunities are most suited to you.

Prescribed rate loans can be an excellent financial planning tool and are one of the few income splitting strategies that remain for many Canadian families.  The concept of income splitting encompasses any strategy that shifts taxable income from an individual with a higher marginal tax rate to a family member who is subject to a lower marginal tax rate. While commonly used to split income between spouses, prescribed rate loans can also be used to efficiently split income with adult children or to fund family investment trusts. A prescribed rate loan can be a great way for a lower income family member to benefit from investment assets while also accessing their lower marginal tax rates.

Many Canadians designate a direct beneficiary on their RRSP, RRIF, TFSA or insurance policies without giving it a second thought (although in Quebec, beneficiary designations are only effective on insurance policies). However, designating a direct beneficiary is not recommended for many plan/policy owners, where they have non-traditional or unique family situations, as it can lead to unfavourable tax implications for beneficiaries.   We’ve created a beneficiary designations decision tree to help you understand the factors you should consider in designating a plan/policy beneficiary.

Did you know that many Canadians are not adequately prepared to pass on or inherit family wealth? This is often due to a lack of communication and planning.  The good news is that it’s never too early or too late to start.  Planning helps you identify tax saving opportunities, mitigate potential financial gaps and maximize your current lifestyle. Here are 10 actions you can begin to take today.

The lifetime capital gains exemption (LCGE) is one of the key tax planning advantages available to small business owners, farmers, and fishers.  In 2021, it can exempt from tax up to $892,218 of capital gains realized on the sale of shares of a qualified small business corporation and up to $1 million of capital gains realized on the sale of shares of a family farm or fishing corporation.  Until recently, existing legislation made it difficult for children to use a corporation to buy shares of a small business, family farm, or fishing corporation from their parents, when their parents wanted to claim the LCGE on the sale of those shares. A private member’s bill was introduced in Parliament last year proposing amendments to the Income Tax Act to alleviate these difficulties. Private member’s bills rarely make it through the legislative process.  However, on June 29, 2021, Bill C-208 received Royal Assent, making it the law (but see cautionary note below). 

With an increasingly aging population, issues around providing services, including financial advice to seniors, are becoming more important. While attention is often focused on funding retirement and wealth transfer to the next generation, susceptibility to fraud often goes unnoticed.

Each June, we honour National Indigenous History Month and National Indigenous Peoples Day. However, these observances cannot be recognized without acknowledging the atrocity of the remains of 215 children discovered in unmarked graves at a former residential school in Kamloops, B.C. This news has deeply saddened all of us at IG Wealth Management, and it is a sombre reminder of our country’s past and the injustice that continues today.

One of the most important documents you should have as part of your estate plan is an up to date power of attorney, otherwise known as a protection mandate in Quebec. This is a document that gives someone else the power to make financial decisions on your behalf if you are unable to. Needless to say, you need to give special consideration to whom you appoint as attorney or mandatary.

An important part of financial planning is making sure that you have an estate plan that meets your personal needs.  A key component of any well constructed estate plan is to make sure that you have an up to date power of attorney for financial decisions (referred to as a “protection mandate” in Quebec).  This is a document where one person gives someone else the power to make financial decisions on your behalf.  If you don’t already have this type of document in place, you should make sure that you speak to an estates lawyer or notary as soon as possible.  Here are some of the reasons why you should address this now:

Financial abuse is on the rise.  Criminals are finding new and innovative ways to take advantage of people, particularly through social media and the internet.  Always be on the lookout for financial abuse and take precautions to protect yourself.  Here are a few things to consider:

IG Wealth Management is a proud sponsor of the Alzheimer’s walk, and as part of that, we want to support Canadians who are dealing with dementia, or may have a family member dealing with dementia.

On Monday, April 19, 2021, Deputy Prime Minister and Minister of Finance Chrystia Freeland presented the 2021 Federal Budget which contains several measures of interest to IG Wealth Management and its clients. This summary contains highlights of these proposals, which are not yet law. Clients should contact their IG Wealth Management Consultant for information on how these proposals may affect their financial plans.

Several measures were introduced during 2020 to help Canadian businesses navigate the economic impacts of COVID-19.  Often these measures included cash payments.  This article provides an overview on what government assistance may be taxable to your business for 2020. 

Several measures were introduced during 2020 to help Canadians navigate the economic impacts of COVID-19.  Often these measures included cash payments.  This article provides an overview on what government assistance may be taxable to you or your loved ones.

A core component of your retirement plan is the CPP retirement benefit (or Québec Pension Plan for Québec residents, which mirrors many aspects of the CPP). CPP offers flexibility as to when payments can begin, which affects how much you could receive.  Familiarizing yourself with CPP provisions can help you decide when to start payments and optimize the benefit throughout your retirement.

To take full advantage of the tax-deferred growth available when investing in a tax-free savings account (TFSA), many Canadians strive to maximize their TFSA contributions as early in the year as possible.  However, while the goal with a TFSA should be to contribute as much as you can within the limits of your available contribution room, you also need to be mindful not to over-contribute.  Putting more money in a calendar year than you’re allowed by law could result in penalties.  The severity of which will depend on the circumstances of the over-contribution. 

With the physical distancing measures in place due to the spread of the COVID-19 virus, many Canadians are now working from home.  If working from home is new for you, you may be wondering whether there are any tax deductions you can claim.  What expenses would be eligible and what documentation would be required?

The Canada Revenue Agency (CRA) calls home office expenses “work-space-in-home-expenses”.   In this article, we’ll provide an overview to help you navigate these work-space-in-home deductions.

Separating from a spouse or common-law partner can be an emotionally difficult and complicated experience. Relationship breakdown is also one of the most significant, and often unexpected, financial planning risks a person can face.   That’s why it’s critical that you understand how a separation or divorce may affect your financial well-being and succession plan.  

Canadians who are not U.S. citizens, green card holders or residents, may be surprised to learn that they too may be subject to U.S. estate tax even if they are considered non-resident aliens in the U.S.

In June, the Canada Revenue Agency (CRA) announced that they will review six years of US real estate transactions to determine if any Canadian taxpayers missed reporting their ownership of real estate property or real estate transactions. Could this apply to you?

When we are young, life insurance is used to protect our family by providing money to replace our income. However, as we approach retirement our need for income replacement lessens and the focus switches to wealth protection. Wealth protection is a permanent concern, so it requires permanent solutions. 

Are you, like many Canadians, planning to renovate your home or cottage? 

As students begin to pay their tuition for the upcoming fall semester, it is important to know what fees and expenses can be deducted on this year’s tax return. This article will highlight some of the key deductions and credits that can help reduce your family tax bill for the 2021 filing year.

Ensuring that your loved ones are cared for after your passing is a common goal for families. This is especially relevant where your loved one is a person living with disabilities. The challenge is – even the most well-intentioned gifts can have unforeseen financial implications. To ensure that your chosen beneficiary’s financial resources, such as social assistance benefits, are not diminished by any gifts, you may wish to consider using a Henson trust among other tax planning strategies as part of your overall estate plan.

The Voluntary Disclosure Program (VDP) provides a second chance for Canadians to correct their previously filed tax returns. However, the program maintains a goal of fairness and is not meant to reward individuals or corporations who have willfully avoided paying their fair share of taxes. It provides accepted applicants relief from prosecution, and depending on the situation, relief from penalties that would otherwise be applied. All taxes owing, plus some interest is required to be paid.

Each year, some Canadians choose to live and work in the U.S. either temporarily or permanently. While working in the U.S., they may choose to participate in a U.S. retirement plan such as a 401(k) or 403(b) plan, or an Individual Retirement Account (“IRA”). When they return to Canada, the Canadian plan holder may be wondering what to do with the funds in these plans.

With limited ability to travel this summer, many Canadians are looking to rent or purchase vacation properties closer to home.  At the same time, non-residents who own Canadian property may also be faced with travel restrictions and offering their cottages for rent or for sale. Before you rent or buy a vacation property from a non-resident, there are a few important tax implications that you should know.

It’s wonderful to be able to leave children an inheritance, but you want to make sure that the wealth you’ve worked so hard to build and set aside for their future is protected, regardless of where life takes them.  Many parents are concerned with the ability of their child to manage a large amount of money, and other concerns may stem from the possibility of a failed relationship.

There is increased financial uncertainty for many high school graduates, post-secondary students and parents right now. Typical summer jobs or internships may not be available, which has impacted how many students and families will cover tuition costs and living expenses. This could be coupled with other unexpected financial challenges as a result of COVID-19’s effect on a family business or investments volatility.

If you’re a U.S. taxpayer, learn about the additional information we can provide which allows you to make an important election for your investment in Canadian mutual funds and will make it easier to file your U.S. tax return.

A family investment trust might be right for you if you have a substantial amount of cash and investments that are not needed to fund your own lifestyle and retirement needs, plus a desire to either:

With the appreciation of the U.S. dollar and the price of U.S. real estate rising in recent years, more Canadians are looking to lock in their gain by selling their U.S. vacation property. Many people are also unable to travel to their property, or may be looking to upgrade or downsize and have decided that now is the time to sell.  Whatever the reason for selling, there are a few things that Canadians should know before listing their property for sale.

The loss of a loved one is difficult and having to deal with the administration of their estate after they’ve passed can be especially overwhelming. Declining markets can add another layer of financial stress when administering an estate during an already emotional time. However, there are tax strategies that can help address a decline in market values.  This article highlights potential tax relief where there has been a decline in the value of assets, both registered and non-registered, after the holder of the accounts has passed away.

With the onset of the COVID-19 pandemic, we have seen inspirational stories of individuals and organizations helping their communities and supporting causes in a variety of ways.  During this time, you may be thinking about how you can contribute more or whether you should revisit your charitable giving approach. 

COVID-19 has created an environment where concerns for our loved ones’ health and economic well-being are both top of mind.  It’s also made many of us appreciate that we’re not invincible, and sometimes we can’t control the future.  This resonates closely for families who have either lost a family member or are concerned about an elderly person in their life.  

With Mother’s Day around the corner, we spoke to IG Private Wealth Management Consultant moms about building financial confidence in the next generation.

Explore how recent changes to amended tax on split income (TOSI) rules apply to and have affected personal rates of tax, pension splitting, taxable capital gains, property and more.

Canadian professionals including physicians, lawyers, dentists, and veterinarians choose to create a professional corporation for a wide variety of personal and financial reasons. Is it right for you?

Whether you’re leaving a little or a lot, the key to protecting your loved ones is simple: just start.

As a business owner, having a well thought out tax and estate plan is key for financial success.

Adding your adult child as a joint owner to your property could have unintended tax and legal consequences.*

As a member of a blended family you need to pay careful attention to how your estate is structured to avoid inadvertently disinheriting your children.