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Beware of the Tax Implications of Flipping Houses in Canada

If you want to lower income taxes on your property flipping business, a corporation can be a solution. Flipping properties is an active business income and properties are inventories. However, if you generate any rental income from these properties, thatu2019s passive income. Thatu2019s why it is very important to consult a corporate income tax accountant in Canada. Visit https://www.maroofhs.com/tax-services-canada/corporate-tax-services-canada/

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Beware of the Tax Implications of Flipping Houses in Canada

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  1. Beware of the Tax Implications of Flipping Houses in Canada https://www.maroofhs.com/tax-services-canada/corporate-tax-services-canada/

  2. Property flipping is a business and taxed as a business income in Canada. Canada Revenue Agency is cracking down to ensure compliance. Many factors decide whether you earned a capital gain from the sale of your house or it is a business. What is the nature of the property? 2. How long you held the property? 3. How many real estate transactions you made? 4. How much effort did you put into renovating the property? 5. What were your original intentions when you purchased the property? 6. Under what circumstances you sold the property?

  3. A great post by a professional income tax accountant in Canada discusses the different income tax and excise tax issues related to flipping houses in Canada. In this comprehensive and easy to understand the post, MaroofHussainSabri, a CPA in Ontario discusses how case law provides the decisive factors to determine if the real estate transactions result in a business income or capital gain. Capital gains are included 50% only in the personal income tax return in Canada, Whereas business income is included in full. Capital gains cannot be offset against the other losses except capital losses. Business income (losses) can be offset with other sources of income except for capital losses. If you want to lower income taxes on your property flipping business, a corporation can be a solution. Flipping properties is an active business income and properties are inventories. However, if you generate any rental income from these properties, that’s passive income. That’s why it is very important to consult a corporate income tax accountant in Canada.

  4. You can reach us at: 3-100 Hanlan Road, Woodbridge, ON L4L 4V8 Phone: (647)724-4308 Email: Canada@MaroofHS.com https://www.maroofhs.com/contact/ https://twitter.com/MaroofHS https://www.facebook.com/MaroofHSCPA

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