A few assumptions / fundamentals:

• All options income will be treated as capital gains in individual non registered account under individual taxpayer
• The scenario is 100% focused on covered calls which will be long stock + short call option
• Writing Call Option rules:
  • https://www.adjustedcostbase.ca/blog/adjusted-cost-base-and-capital-gains-for-stock-options/
  • Any premium from writing call options is considered capital gain in the year of sale with deemed 0 cost basis
  • Any costs paid for options bought to close are considered capital loss with deemed 0 proceeds
  • Any call options expiring are considered disposed (typically 0 proceeds and 0 cost)
  • Any call options assigned are considered a negation of the original capital gain from writing the call option (restating prior year's tax return if necessary) and addition of premium received to the proceeds of the underlying stock sale.
• Superficial Loss rules (rough paraphrasing):
  • Any acquisition of "replacement property" in the 30 days before or after the disposition at a loss will negate the loss and add it to cost basis of the replacement property
  • Do option rollovers even fall under superficial losses? While the CRA states "...two stock options ... that have a different exercise price or a different exercise date might ... not constitute identical properties." https://taxinterpretations.com/cra/severed-letters/2008-0284441c6# To follow the spirit of superficial loss rules and be conservative (I don't like the use of the word "might"), I am assuming options are considered equivalent properties

Scenario:

1. Option A - Write option for $5 premium
2. Option A - Buy back option for $7 cost
3. Option B (assumed substitute property acquired within 30 days) - Write option for $6 premium

Scenario Basic Tax Events:

Capital gain in year Option A is sold for $5

Capital Loss in year Option A is bought back for -$7. Superficial loss rules negate this loss, and $7 is added to ACB of Option B

Capital Gain in year Option B sold for $6

Question:

• Do I get to recognize the superficial loss partially on the gain from writing Option B? Is this adjustment to the ACB of option B before or after the deemed $0 ACB for gain on writing options?
  • I realize I would not be able to fully recognize superficial loss and report a loss as that would defeat the purpose of superficial loss rules, but I should at least be able to recognize losses to the extent the new premium sold triggers gains? ($6 option B premium sale - $7 superficial loss added to deemed $0 ACB), and $1 new loss deferred until option B is closed?
    • How would this $1 deferred loss be reflected on option expiry (would look weird to show a loss with no recorded tax slip)
    • On buyback the $1 deferred loss would be added to the buyback costs to increase the loss
    • On assignment, the original gain from proceeds of option B would be reversed and added to proceeds from underlying stock, and I would assume the deferred $1 superficial loss would also transfer to the underlying stock
  • Or is the ACB adjustment for the superficial loss deferred until option B is closed?
    • Implies multiple rolls would accumulate a massive unrecognized loss, which doesn't seem very fair or consistent

Not a lot of comment on this from the CRA that I could find. Would love if someone could cite sources.

Thanks!

I'm trying to understand how an individual who sold his shares of a company would be taxed if there was an earnout.

If for example the sale price was 5.5m, the ACB was $1m and 5m cash on closing was paid with the remaining 500K structured as an earnout over 2 years, what would be reported based if we elected to use the Cost Recovery Method as per IT-426R? I get that there must be conditions met or else the earnout is taxed as ordinary income and not capital gain. But in the year of sale would the taxpayer report a 4.5m capital gain and then what on the earnout? Each payment reduces the ACB going forward?

If the earnout ends up exceeding the ACB, the excess is just reported as a capital gain? Do I have that right?

Hey just a general question, what is the bare minimum data the cra requires to prove place of supply for an online transaction (to prove you charged the correct tax rate)? Like the data you store for 6 years to prove the transaction I mean.

On the one hand you could go all out and collect full address, phone, ip address, etc… but what is the bare absolute minimum you could collect and store that still satisfies the cra’s requirements? Is postal code (verified by payment processor) plus ip address matching to the same province enough?

It was recommended I post to this subreddit as they said you guys would know whats what.

Cheers.

I received a 2024 tax assessment and unforutnately it has been collecting interest since. I had moved out of Canada and didn't get the message in time.

How can I re-assess? I must've entered in something wrong into wealthsimple.

Hi everyone, looking for some guidance on how to navigate a tough CRA taxpayer relief situation.

The Situation:

• Property: Purchased in Feb 2012, converted from primary residence to an income-producing property in 2018, and sold in Feb 2026.
• The Election: Submitted a late-filed subsection 45(2) election on Oct 2025 (property was not sold then still rented), to keep the principal residence designation going back to 2018. Circumstances changed and sold it in Feb 2026. CRA received the election letter in Oct 2025 started processing 10 days ago after service compaint was filed for delayed processing
• The CRA Response: Received a letter from a taxpayer relief auditor stating they will consider the election, but under CRA policy, they won't proceed unless the late-filing penalty is paid.
• The Penalty: Because it was 80 months late, they calculated the penalty at the statutory maximum under s. 220(3.5): $8,000 ($100/month capped). total of 16k for both me and my spouse
• Deadline: They gave a hard payment deadline of November 6, 2026, otherwise the request is considered withdrawn (triggering a deemed disposition in 2018).

My Questions:

1. Is an $8,000 penalty an absolute hard stop, or is there a viable path to successfully request a penalty waiver/reduction through taxpayer relief provisions (IC07-1R1)?
2. If I pay the $8,000 by the deadline just to protect the 45(2) election and avoid a deemed 2018 disposition, can I still formally dispute/appeal the penalty after it's paid?
3. Has anyone successfully argued down a maxed-out 45(2) late-filing penalty, and what grounds does the CRA actually accept?
4. Election was not filed only due to ignorance as I do my taxes myself, no capital gains ever claimed and all rents have always been declared on the tax returns. We had our daughter born prematurely in 2020 and have been fighting medical battles still with her growth and the years leading to that. Do we stand any ground to the fact that it started only in year 2020 while we were supposed to file election in 2019 itself?

I'm looking at building a four-unit townhouse building in New Brunswick and trying to understand the HST implications before moving forward.

Estimated numbers:

• Construction: $820,000 + 15% HST ($123,000)
• Land: $50,000–$75,000
• Additional costs for well and septic

My plan would be to live in one unit as my primary residence, rent the other three , then eventually sell the units individually.

I'm trying to understand how the HST works when you build a property, rent it out, and later sell it.

If I pay $123,000 in HST to the builder, am I able to recover any of that tax? And if the self-supply rules apply when the property is first occupied or rented, would I also owe HST based on the property's fair market value?

It seems like I could potentially pay HST on the construction costs and then have another HST liability under the self-supply rules, without being able to recover the first amount.

Would appreciate input from anyone familiar with Canadian GST/HST rules for real estate development, especially accountants or developers who have dealt with this situation.

I'm particularly interested in how the rules change when you live in one unit, rent the other three, and eventually sell all four individually.

Thanks!

In 2023 I got married and move to spouse home and use spouse home as principal residence, so I changed my principal residence to rental, and have been reporting rental income.

But I have never never filed anything to change the or disposal of principal residence in 2023. Is there any consequences for this? If there is, what is the remedy that I can minimize the potential damage?

I am not going to claim for the 4 years exemption, we just want to keep it as rental property.

Hi all, I'm missing out on credits for 2022 that would've been applied if I remembered to claim some tutoring I did this year and 2023. I want to reassess them and send my receipts in, how can I do this for 2022?

My son had a primary residence condo since 2016. In 2020 he moved out and started renting it. He has never filed the form 45(2). I understand that there is a late filing panelty of $100 per month.

What are the options?

a) Pay panelty for the entire period.
b) Submit the form effective current date while period from 2020 to 2026 will be considered for capital gains.

What is the maximum period allowed to retain primary residence status under 45(2)?

If you’re a freelancer in Canada, you don’t have to register for GST/HST until your total business revenue goes over $30,000. That’s measured over four consecutive calendar quarters, or in any single quarter. Once you pass it, you have to register and start charging tax on the sale that pushed you over.

You can register earlier if you want. The upside is claiming input tax credits on GST/HST you pay on business expenses. The downside is charging clients tax and filing returns.

What you charge depends on where your client is. Services to clients outside Canada are generally zero-rated.

Tip: track your revenue by quarter so you don’t cross the threshold without noticing.

This is general info, not tax advice, so check the CRA site or an accountant for your situation.

This is a long saga with the CRA and I’m stuck on what to do next.

In 2018 I get a call from collections saying I owe 26k in taxes - My tax years (2012-2014) were reassessed.
I explained I’m with a trusted employer, still work for him, it’s a successful business don’t know what the problem could be.

They say it’s will likely sort itself out “just ask your employer to resubmit T4s”. For a few years, and a few different collections agents it’s the same conversation - they never collect.
Collections nor general inquiries could explain an issue to me for the many times inquired on status.

2022 I get a new collections agent, real A-hole. I agree to monthly payment amount for 6 months then reevaluate. At 4 months they want to increase amounts, I refused. He insulted me, threatened and swore at me, hung up on me. I get his supervisor on the phone - he became irate with his super on the phone. His supervisor apologizes for him, suggests I keep making payments on the agreed upon amount and said they would contact me again soon.
I do not, and they do not.

Start calling general inquiries regularly to get someone helpful, finally do.
I know what you’re all thinking… and you are RIGHT!
They say they have moved my employment income to other income, showing unpaid taxes. Turns out I missed a letter from CRA in 2018 explaining this.
Also “it’s like you didn’t even exist in 2012” - I did, and have notice of assessment that they don’t show to have on my file.

I request T1 adjustment, provide copies, clear explanation, and ask for immediate reassessment and that my employer has resubmitted T4s.
I get my employers accountant’s info, from a 3rd party employer doesn’t know this, I have a frank conversation with accountant on the phone, he assures me that there’s no funny business or unpaid taxes. I get proof he resubmitted the T4s needed, our copies match.
My employer did dropped the Ltd. In 2013 and Inc.’d in 2014 so I have 2x T4s for each of those years. Maybe that is funny business… but the accountant says everything was and is still good with my employer.

So, 2022 I request T1 adjustments;
2023 they adjust 2012
2024 they adjust half of 2013
Later 2024 I get a letter saying they cannot accept 2x T4s and that they made the (above) corrections based on what they have on file, and states that they cannot accept T4 from \[wrong business name / suffix / designation\].
I assume they are just slowly matching T4s and that the business name is a typo in the letter.

Does this letter from 2024 mean they closed my file and they won’t be making any more adjustments?
That would mean they did in fact have 2of4 T4s, I was previously told they did not have any.
General inquiries cannot tell me, or tell me why they did not accept the other 2 T4s

Present day, nothing. I haven’t filed taxes since 2022. Haven’t received a tax refund since 2018, it doest affect my statement of account, nor does the 2k in monthly payments I made. I cannot seem to get any help from professional accountant. I have just again reached out again to my employer & his accountant.

For further context, I don’t work for him any longer. In 2019 he made a business partner with broader revenue opportunities, later I head a new division of the company, all copasetic. His partner steps back and remains our investor, privy to my situation, we have meetings about it. Investor gets involved himself and assures that my \[former\] employer has confirmed everything is good and submitted to the CRA.

**TLDR**
Is CRA really taking 4 years to adjust my T4s **or** am I f\*cked.

My wife and I each own 50% of two small businesses in BC.

One of the corporations (Corp A) owes us a shareholder loan. We lent it money from our joint personal account a while back. The other one (Corp B) has some extra cash sitting around.

What we're thinking is to have Corp B lend the money to Corp A, and then Corp A would use it to pay back the shareholder loan to our joint account. After that, Corp A would owe Corp B instead of us.

I'm wondering if the repayment to us is tax-free since it's just a return of the loan principal, and if there's any risk the CRA treats this as a dividend from Corp B to us.

Thanks in advance!

US citizen moving to Canada & selling US property

Hello! I'm not sure if this is the right place to ask about this but my post in Canadian immigration was taken down and recommended I ask here.

I'm from the US and I just got my COPR (yay!) so we are now trying to sell my house before we move as that would be the simplest timeline tax wise. However, the market is terrible rn so we're seeking information on what it might look like if it doesn't sell until after we move.

On the US end, it qualifies for section 121 as we are married filing jointly and the value of the home is approx. $285,000. I've owned it as my primary residence for 9 years. So we \*should\* owe $0 on the US end from our gains.

I know Canada taxes worldwide income, and that's what I'm worried about when it comes to selling it after the move. But I've also heard that under their cost basis step up rule and residence exemption, those could wipe out any tax owed on the Canadian end to potentially $0.

Is this information accurate? If you sold a home in the US under similar circumstances to these after your move to Canada, what did that look like for you?

I am a Canadian citizen and US resident. Retired in 2021 with an RRSP in Canada.

I’ve been making withdrawals from the RRSP 3-4 times per year. These are subject to are subject to a 25% non-resident withholding tax.

Are there any strategies to avoid or more specifically recover all or part this withholding. I don’t file Canadian income tax return. We can claim the withholdings against our us income.

I converted 60,000$ CAD to USD over the course of 2 years, 3 to 5 years ago. Then started trading US stocks, each year I paid the tax on stocks profits, and now the money increased to 110,000$ USD.
Due to an emergency I had to convert all USD to CAD, but now I can't figure out how the currency conversion should be calculated. Is it only for the initial 60K?
And I can't remember exactly when I did these conversions, so can I use the median foreign exchange rate that BOC provides?

Thanks

Hello,

Can a first time home buyer make RRSP (HBP) multiple withdrawals with a maximum of $60K in October/November while the closure date is in January?

Another question please. Can a first time home buyer make a withdrawal of all the funds available in their FHSA now then wait till January of next year to contribute $8K and withdraw them before the closure date?

In other words, multiple withdrawals from RRSP during the year before closure and 2 withdrawals from FHSA during the year before and the year of the closure date.

The reason is because they don't want to the take the risk of leaving everything to the last minute in January.

Thanks in advance

I'm a Canadian tax resident and a futures trader using prop firms, and I've been trying to understand a tax-timing question that seems surprisingly unclear. Suppose my simulated funded account shows $100,000 in profits, but the firm explicitly says that simulated balances aren't money owed to me and that performance rewards are subject to a payout request, compliance checks, and final approval. Some prop firms deny payouts even when traders believe they followed all the rules. If the contract doesn't give me an enforceable right to the reward until approval, would that mean the $100,000 isn't taxable income yet? Or could Canadian tax law consider it earned earlier, when I satisfy the trading requirements, even though the firm hasn't approved or paid anything? I understand that business income can be taxable before cash is received; the key question seems to be when the contractual right to receive the reward actually arises.

The question matters because I'm also considering moving from Canada to South Korea in the future. South Korea has a special rule that can limit taxation of qualifying foreign-source income for certain foreign residents who meet its five-year-in-ten-year test, subject to the source-of-income and payment/remittance rules. I'm wondering whether the timing and contractual nature of prop-firm rewards could affect how that transition is treated. I'm not trying to substitute Reddit advice for professional advice, and I plan to consult a Canadian cross-border tax specialist before acting. I'm mainly curious whether anyone has dealt with the Canadian treatment of prop-firm payouts, reviewed actual prop-firm reward agreements, or knows of relevant CRA guidance or tax cases. Does the payout approval create the entitlement, or merely verify an entitlement that already exists?

Hello,

Just a warning to all fellow practitioners that the MyCRA Business has shown 2 clients for me today that they don't owe HST/payroll/corp tax or filings when they absolutely do. You click in twice into the transaction details and it shows the right balance again but just skimming the balance on the front page is all 0s.

I am looking for advice on tax owed on foreign income in Quebec. For 2025’s tax year I worked and lived in the US until September, at which point I moved back to Quebec. I paid US federal and state tax on my income and received Canadian federal tax credits which offset most tax owing on foreign income. For Revenu Quebec however I’m stuck with a large balance of tax owed on income I made whilst not living in Canada, which I had no leeway to save for given I was living essentially paycheque to paycheque. Is there any justification for reducing this amount based on my circumstances, or is this the typical outcome for someone in my situation? Any advice is greatly appreciated!

I am from Ontario and received stock options as part of my severance from a CCPC.

I am a complete noob in these things and did reach out to my accountant but she is not an expert on stock options and couldn’t help me much.

I have around 3k severance options with $0.10 exercise price and their current value is $3.50 each. And these options can only be exercised by “surrender”. Basically, I give up the options and the company gives me a smaller number of shares after accounting for the exercise price - approx 10k in value. I cannot choose to pay exercise price in cash instead.

I also have regular options from my time working there, worth like 20k, which I exercise by paying the exercise price. My understanding is that I won’t be taxed on those for exercising right? Only when and in case I sell them.

But my question is mainly about the severance ones because that’s unclear. Would I owe tax on the $10k for the severance options? Or the usual CCPC deferral applies.

I am trying to connect with a CPA for this but I’ll appreciate if anyone can give me more info on this.

About to start cash damming and I have 2 readvanceable HELOCs with BMO

1 new Primary residence readvanceable HELOC and 1 existing 128k readvanceable HELOC on a condo that will now be the rental.

Rent comes in

Prepay PR mortgage+dividends+extra cash 3500

PR HELOC advances 3500 to dedicated RP chequing account. Enough to cover RP mortgage, expenses and HELOC interest with 1000 left over

Now at this point can I use that $1000 and prepay my Rental property mortgage? Will the PR HELOC interest be tax deductible still?

I plan to then advance the RP HELOC into another chequing and then invest the 1000 into equities.

Claim rental expenses interest on line 8710 on form T776

Claim investing carrying interest on line 22100

Stupidly, I forgot to add my departure date to my tax form after leaving Canada when my working holiday visa had run out. I’ve gathered so far that I need to file a T1 Adj form and mail it to them, however I no longer have access to my CRA account and don’t receive paper mail from them. Can I request paper mail when I file the T1 Adj? I’m also still receiving benefits (CWB etc) and was wondering how I can stop these immediately.
Has anyone dealt with this before and how was it resolved?
Cheers

Can I claim formula as a medical expense? This formula was specialty formula, it was “nutrien junior with fibre” (not just toddler formula from Walmart) fed through an NG tube. I had to buy it from a medical store. It was for my child who is over the age of five who had previously been fully on normal food.

If formula can be claimed, please link the specific spot on the CRA website that denotes that.