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The following News Release or Speech has just been posted on the Finance Canada Site

The Honourable Jim Flaherty, Minister of Finance, today proposed technical changes to extend the application of certain income tax rules that apply to capital gains and losses of a corporation on an acquisition of control to also apply to capital gains and losses on debt denominated in a foreign currency.

Under existing tax rules in the Income Tax Act (or Act), a corporation that undergoes an acquisition of control (for example, when another taxpayer buys all of its shares) is required to recognize, for income tax purposes, all of its accrued capital losses on property that the corporation owns at that time. Those newly-realized capital losses, together with the corporation’s other capital losses, cannot be used after the acquisition of control. The corporation can, however, elect to realize any accrued capital gains on other property that the corporation owns, allowing it to use some or all of its capital losses to offset those capital gains.

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Listen .. trust your HART …

If you don’t have the money to pay your income taxes, you should still make an effort to file your income tax return ON TIME. This way, it’s only a “collection issue” and you will only be subject to interest on the arrears balances owing. If you file late or after the due date (April 30th for most individuals and June 15th for self-employed individuals), you will have to pay a flat percentage penalty of the balance you owe plus a flat percentage penalty of the balance owing is added for every month you are late. If you’re not only late, but there was a request from Canada Revenue Agency to file your tax return .. generally these penalty rates are doubled!

Some guy once said “The difference between tax avoidance and tax evasion is the thickness of a prison wall.”. There are legal ways to minimize your income tax bill with planning and advice of your professional accountant or income tax preparer .. but keep in mind that there are also laws in place to prevent the avoidance of income taxes. Now, evasion - is much worse than being a deadbeat, because in addition to the penalties and interest that you will be charged (if caught) .. it’s also a criminal offense.

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