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U.S. Tax Tips

Feb 10, 2020

Investing in the U.S. via partnerships or limited liability companies (LLCs) – Part 2

As discussed in Part 1, a partner is deemed to be doing business in the U.S. via their interest in the partnership.  Partnerships, in general, do not pay tax, the partners do.   As such, with respect to a foreign partner the U.S. Congress was (and still is) concerned that once funds leave the United States that the U.S. Internal Revenue Service (IRS) may be unable to enforce payment of the non-resident’s U.S. tax liability.  As such, the Internal Revenue Code imposes a withholding obligation on the partnership itself.  IRC §1446 states

Jan 27, 2020

Investing in the U.S. via partnerships or limited liability companies (LLCs) – Part 1

Here at Cadesky U.S. Tax Ltd., we receive a lot of inquiries in regards to how to structure a non-resident’s investment into the United States. Many of these investments involve U.S. real property or marketable securities. In addition, we also receive a lot of questions from Canadian advisors and new clients who have held these investments for a number of years but who have never filed any U.S. tax returns, primarily because these investments have not generated any revenue until the underlying investments are being sold.

Jan 15, 2020

The Secure Act

On December 20, 2019 President Trump signed into law The Setting Every Community Up for Retirement Enhancement Act (aka the “Secure Act”). A number of authors have described The Secure Act as one of the most dynamic changes to retirement legislation since the Pension Protection Act of 2006. All changes are effective as of January 1, 2020. In particular there are 4 main changes (with respect to pension items)…

Tax Tips

Dec 02, 2019

Carryback of Post Mortem Charitable Donations – Timelines and Conditions

It is well understood that qualified donations made by an individual generate donation tax credits in the year the donation is made or the subsequent five taxation years. What are less known are donation “carryback” rules that are available when a donation is made in the year of an individual’s death or some of the subsequent years.

Nov 18, 2019

Post-Fairmont Rectification – A Small Measure of Guidance

Rectification, in simple terms, is a legal process where an entity petitions the court to change previously executed written documents.  In the tax world, rectification may be used by a taxpayer to change the terms of a legal document to alter the tax results of a transaction, but is generally regarded by practitioners as a bit of a “Hail Mary” as it is an expensive and time consuming exercise with uncertain results.  The fact that the threshold for granting a rectification order is quite high does not help the cause.  This threshold was further elevated by the judgement in Fairmont Hotels, 2016 SCC 56, which narrowed the scope of rectification.  However, it appears that at least one provincial court is showing a willingness to interpret the tests laid out in Fairmont in a taxpayer friendly manner. 

Nov 01, 2019

The Principal Residence Exemption – Some Quirks

The principal residence exemption allows Canadians to reduce or eliminate Canadian income tax on gains resulting from the disposition of a home or vacation property a Canadian “ordinarily inhabits”.  Eligibility for the exemption is being scrutinized more than in the past, by the CRA.

Transfer Pricing Newsletter

Sep 27, 2017

Eaton A.P.A. cancellations were an abuse of I.R.S. discretion

This article appears in Insights vol. 4, Issue 9.  Insights… Read more »

May 29, 2017

Amazon makes the CUT – an important taxpayer win, a reminder to consider transactional evidence

This article also appears in the May issue of Insights,… Read more »

Dec 15, 2016

Is the CRA skipping dinner in the hope of getting its deserts? Digesting the “new” Canadian transfer pricing documentation standard

The CRA was recently asked “Will the CRA’s expectations of… Read more »