TAX CONCEPTS
Insurance premiums, childcare services, educational services, dental services
What are examples of exempt supplies for GST purposes?
A transaction where the acquired company has inputs, processes, and outputs
What is a business combination
Cash surrender value of life insurance, cloud computing, alternative minimum tax
What are items that have enacted changes to ASPE standards coming into effect in the next two years?
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A proposal under budget 2024 that may help ease the burden of the new capital gains inclusion rate on family owned qualifying small business
What is the Canadian entrepreneur’s incentive?
An auditing technique that involves testing internal controls to ensure that financial reporting is reliable, assets are safeguarded, and fraud is prevented
What is a control based audit approach?
These are examples of asset additions that are not subject to subsection 1100 (half year rule)
What are small tools and linens, and related party purchases
The first step in doing the acquisition method for a business combination
What is “identify the acquirer”
This is the maximum maturity length at time of purchase of items that can be considered cash equivalents.
What is 90 days?
The optimal age to take CPP if you live to the age of 85
What is 69 years of age?
These are two key fraud risks assumed to be in every audit
What are Management override of controls and revenue recognition?
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This tax election permits eligible transferors to elect jointly with a transferee corporation, on the transfer of property, to fix an “agreed amount” which both parties use to account for the transfer for income tax purposes, allowing for a tax deferred transfer or property
What is a Section 85 rollover
In a sale of a business, this is one of the key benefits for a seller to wish to sell shares rather than selling assets.
What is the ability to utilize the lifetime capital gains deduction?
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This additional disclosure is a requirement in any file that applies the taxes payable method when it accounts for its income taxes, but is not required when using the future taxes method
What is a rate reconciliation?
The amount that the first year CCA claim is adjusted by for assets available for use in 2024 and 2025 under AIIP rules
What is 2x the half year rule?
Assets, revenue, equity, net income, EBITDA
What are potential basis' for materiality?
The maximum taxable capital an associated group can have before your SBD is fully ground
What is $50 million?
In a share sale, these amounts get added to the cost of the share for tax purposes.
What are transaction costs, including legal fees and commissions?
Disclosure of these amounts is required in your financial statements, due to the fact that directors can be held personally liable if they are not paid.
What are government payables?
This CCA class for zero emission vehicles has a limit of $61,000 per vehicle
What is Class 54?
This is the risk of errors in the absence of controls for a specific balance
What is inherent risk?
A balance that generally reflects taxable income that has not benefited from the small business deduction or any other special tax rate.
What is GRIP?
When an company has significant influence over an investment, these are its accounting policy choices for how to account for that investment.
What is cost method or equity method?
These types of transactions are required to be disclosed in the financial statements, regardless of whether they are above your trivial threshold or not.
What are related party transactions?
The new effective tax rate on capital gains for corporations
What is 31.11%
This amendment to this handbook section affects audits with year ends of Dec 31/24 and later, and adjust our approach to audits that have multiple components
What is CAS 600?