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Welcome to summer! We are so excited to enjoy the warmer weather. We were pretty busy in our tax practice catching up after personal tax season, I hope you were the same!

We just finalized a sale of the practice and building. The bank was fine to finance the purchase of shares of the professional practice, but not as much the purchase of shares of the building co. Finally, the loan for the purchase of the building was collateralized through the Business Development Bank of Canada and they allowed the financing as intended. This is a reminder that you may think you have financing lined up, but there can be a few hiccups that you may have to overcome.

For our friends in Toronto, we are talking with a prospective seller for a book of business of $100,000. Stay tuned for more details.

Practice Tips

As you know, CRA has recently clarified how the Canada Emergency Wage Subsidy (CEWS) is reported in corporate tax returns. CEWS is now considered to have been received on the last day of the period it relates to. For example, period 10 covers November 22 to December 19, 2020. Even if you applied for and/or received the subsidy in 2021, CRA considers the money to be income in December 2020. I think CRA is forcing the definition of "receivable" under ITA 12(1)(x). We notified our clients about this new interpretation and we left it up to them to decide if they want to amend the returns. In our opinion, although there is a risk, the financial liability should be limited to the penalty amount for the additional corporate tax in Year 1 and the 5% interest applied to the same amount up to Year 2 when the subsidy is reported.

As always, if you'd like to get in touch about practice management tips or transitioning your practice, we are happy to connect.