My question is: Canadian-specific
QUESTION: I own a Real Estate Development Company and have transferred a
home I built from the company to my personal name. I rented the house from
the company for one year and then had it appraised and transferred at the
appraised value. No money however changed hands. I assumed that the equity
in the house would be treated as taxable income and I would pay taxes based
on this. Does this work or does money actually have to change hands?
david ingram replies:
You are dancing on the head of a pin and subject to big, big penalties if you
have overstepped a line with regard to the GST on the house, shareholder's
appropriation and retroactive penalties and interest.
Seek immediate help before the end of 2005 to get amendments in if
You need to talk to an accountant who understands shareholder's
appropriation (where a shareholder causes his or her company to bestow a
benefit on the shareholder at a rate or cost which would not be given to a
stranger) AND when GST is due and payable and at what value.
I could genuinely write a 300 or 400 page book on the disasters that have
happened to builders in your case when the CRA catches up two or three years
CEN-TA Cross Border Services - Tax, Visas, Immigration