Monday, 24 March 2014

Watch Out Flippers - CRA is on a Hunt

Year after year the Canadian Revenue Agency goes after condo flippers. Flipping condos is a business according to the agency. If the CRA says you are in the business of flipping condominiums then you may not qualify to be taxed under capital gains tax law. Tax on capital gains works out to be about 25% of a capital gain for people making under $250,000. However, if you were a flipper then be ready to pay at your marginal tax rate. 

For example, if your capital gain was $200,000 then your tax bill would be $50,000 under capital gains tax law. But if you are a flipper and your marginal tax rate was 40% then you would be paying $80,000. 

If you make a false disclosure on your tax return you could face a penalty of 50% of the tax owed. 



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