Make no mistake CRA will search for your unreported income

So how will they do it?  John Lorinc outlines eight places CRA will check for unreported income in an article – here are a few to get you thinking.

“Repairs or renovations. If your company owns real estate, make sure you don’t claim capital improvements as repairs that can be deducted. Jonathan Garbutt, a tax lawyer, says Revenue Canada will home in on cash-intensive businesses that buy, renovate, and sell buildings because unreported cash income can be used to pay contractors under the table. “Revenue Canada knows this scam and is looking at families with cash businesses and also property flips where there have been big cap gains in an unduly short time,” he explains. Net-worth audit. Toronto tax lawyer David Piccolo says Revenue Canada will look to see if your lifestyle is roughly equivalent to your income and net worth. That comparison may involve estimates on your investments and other assets, especially if they include equities whose values fluctuate. “When you have a net-worth audit,” Piccolo counsels, “you almost have to go through it with a fine-tooth comb” to see if Revenue Canada’s assumptions are accurate. Inferred revenues. With cash-intensive businesses, such as restaurants, Revenue Canada has taken to double-checking reported company revenues by indirect means, such as extrapolating total sales based on tip income declared by wait staff.” To read Lorinc’s full list click here. | Raymond Matt, CFP, CLU, TEP, CHS

Is Carney buying time with mixed messages?

“Sometimes it’s best to not say anything at all. But for the Bank of Canada, that isn’t an option right now,” Gordon Isfeld wrote for the Financial Post yesterday. Isfeld continued, “It’s been a couple of weeks of uncharacteristic confusion in financial markets over perceived mixed messages from the central bank on its monetary policy — all in stark contrast to its oft-touted goal of clarity and transparency. First, comments in a Vancouver Island speech on Oct. 15 were quickly interpreted on Bay Street as a critical shift in thinking by Mark Carney and his inner circle. Mr. Carney did not include in his speech an often-repeated line that ‘modest withdrawal of the present considerable monetary policy stimulus may become appropriate.’ By dropping what had become a standard line of interest-rate guidance, he set some tongues wagging. Was that a hawkish or dovish move? Others were confused by the addition of another line, saying the bank ‘would clearly declare’ its intentions if it decided to ‘lean against emerging imbalances in household debt.’ Wasn’t Mr. Carney actually offering a less hawkish assessment, setting the stage for telegraphed rate increases?” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

Fidel Castro addresses health rumors, criticizes Western media

“Former Cuban leader Fidel Castro said he doesn’t even suffer from a headache in an article he published in state-media Monday criticizing those who spread rumours he was on his death bed,” Paul Haven wrote for The Associated Press yesterday. The article, published by The Globe and Mail, continued, “The article is accompanied by photos taken by son Alex Castro that show the 86-year-old revolutionary icon standing outside near some trees wearing a checked shirt and cowboy hat, including one in which he is seen reading Friday’s copy of the Communist Party newspaper Granma. ‘I don’t even remember what a headache feels like,’ Mr. Castro claims, adding that he was releasing the photos to show ‘how dishonest’ the rumour mongers have been.” Quite the coincidence that the Castro health rumors coincide with the 50-year anniversary of the Cuban Missile Crisis which saw the world gripped in fright of a nuclear Armageddon during the 13-day standoff in October of 1962 thanks to the relationship of Russia, the United States and Cuba.  Much attention has been paid by the media to this anniversary with stories of current nuclear-armed countries, new ‘threats’ and further fear-monger style stories about future relationships with Iran and Russia. Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

Canadian housing market ‘faltering’

“Canada’s housing market is faltering just as the U.S. market roars back to life. This sudden reversal of the narrative that has prevailed since the U.S. housing bust in 2006 is about to make Mark Carney’s interest rate juggling act much trickier. The Bank of Canada’s next rate-setting announcement is Tuesday, followed by the monetary policy report Wednesday,” Barrie McKenna of The Globe and Mail wrote for the newspaper on Monday. The article continued, “There won’t be a rate hike – not yet, anyway. But the betting among some Carney watchers is that the bank governor will drop his implicit projection of higher rates soon, or at least modify the bank’s now-familiar pledge of ‘some modest withdrawal’ of rock-bottom rates and monetary stimulus. Mr. Carney is facing an unusually uneasy global economic environment. China’s potent economy is slowing. Europe’s debt crisis continues to fester. And while U.S. prospects are looking up – most notably in housing – the uncertainty surrounding the November election and the looming fiscal cliff have economists and investors on edge.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

Obama Strong in Second Debate, Talks Contraceptives

  “A re-energized President Barack Obama made an open plea for women’s votes in his second debate against Republican nominee Mitt Romney, underscoring his urgent need to rebuild a big lead among female electors to hold on to the White House,” Konrad Yakabuski wrote today for The Globe and Mail following the candidates second debate in New York last night. Yakabuski’s article continued, “The two candidates also clashed bitterly over energy policy, trade, taxes and last month’s attack on a U.S. consulate during Tuesday’s town-hall session, a high-decibel encounter that reflected an increasingly tight race leading up to the Nov. 6 vote. The debate was a critical test for Mr. Obama, whose lead in the polls evaporated after his limp performance in the first presidential debate on Oct. 3. Mr. Romney’s support among women spiked after that debate, shrinking the gender gap that had favoured the President. Mr. Obama was not about to repeat his mistake and used the town-hall forum to paint Mr. Romney as a ‘more extreme’ candidate than George W. Bush on social issues, one who would restrict women’s access to contraception. He also accused his opponent, who has touted his five-point plan to get the economy moving, as having only a ‘one-point plan’ aimed at favouring the wealthy. ‘The choice in this election is going to be whose promises are going to be more likely to help you in your life, make sure your kids can go to college, make sure that you are getting a good-paying job, making sure that Medicare and Social Security will be there for you,’ Mr. Obama said. Noting that his health-care law requires employers to cover birth control in employee health-insurance plans, Mr. Obama said Mr. Romney opposed the policy. ‘That’s not the kind of advocacy that women need.'” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

Why women have to continue to fight for their rights

The speech Australian Prime Minister Julia Gillard made where she slammed leader of the opposition Tony Abbott, accusing him of sexism and misogyny happened a week ago and in the modern news world that easily could mean an old story – unimportant, blasé. But, as Mr. Gillard noted herself while speaking during a young Indian leaders’ forum held at the Australian High Commission after expressing her surprise that the speech went viral, it appears that the story hasn’t gone away at all.  “I hadn’t quite expected at the time that I gave that speech that it would be looked at on social media in India and beyond. But I understand that it has been and so I suspect that I will be talking about these issues for a long, long time to come. But that’s a good thing because it means we’re all focused on thinking about it,” Mr. Gillard said, as reported by Phillip Hudson for the Herald Sun. “When Julia Gillard appointed Peter Slipper as speaker of Australia’s federal parliament, it seemed a clever tactical ploy to bolster the standing of her minority Labor government,” an article posted by The Economist over the weekend wrote.  It continued, “‘Slippery Pete’ had fallen out with his conservative opposition colleagues. His elevation deprived them of a parliamentary vote. Less than a year later, the ploy crumbled. Mr Slipper quit tearfully on October 9th over sleazy text messages he had sent to a former staff member. The drama erupted amid a broader debate over sexist political attacks against Ms Gillard, the first woman prime minister.” Click here to read the full The Economist article that gives more background information about what went down in the the Australian house of Parliament.   | Raymond Matt, CFP, CLU, TEP, CHS

McGuinty stepping down shows cracks in Liberal leadership

 “When announcing his resignation as Premier of Ontario on Monday night, Dalton McGuinty said that it was time for the Liberal party to be renewed, with fresh leadership. It was a typically McGuinty-esque positive spin on an unpalatable truth — the Ontario Liberal Party does indeed need new leadership, but only because of how badly the current leadership has made a hash of things,” Matt Gurney wrote in a National Post article yesterday following Dalton McGuinty’s resignation speech. Gurney continued, “No matter what Mr. McGuinty said, and what Liberal spin doctors will say in the days to come, the truth of the matter is that Mr. McGuinty stepped down because his party’s power plant shenanigans simply weren’t something that could be explained away. Not even by someone as good at explaining things away as Mr. McGuinty. Ahead of last fall’s election, with the Liberals down by double-digits in the polls, the decision to scrap construction of two gas-fired power plants in Oakville and Mississauga must have made sense to desperate Liberals. Their plan was simple: Cancel the plants, win a majority, and trust in Mr. McGuinty to ride out any backlash. The gambit almost worked — the Liberals only missed capturing a third majority by one.” Click here to read Gurney’s full article. | Raymond Matt, CFP, CLU, TEP, CHS

French & American Quantum Physicists Win Nobel Prize

Yesterday American physicist David Wineland and French physicist Serge Haroche were notified that they have been honored with the Nobel prize in physics thanks to their decades-long work in the field of quantum optics, specifically with the property of super position, as described by Wineland in an AP interview (link below). The prestigious award recognizes Wineland’s work, that he has been studying for 37 years, in which as he describes is the trapping of atoms and then making them exist in two places at once in the quantum realm.  Very exciting and inspiring science. Video of Wineland being interviewed after finding out he won can be seen here in a Globe and Mail video article. To read about Wineland and Haroche’s work in more detail check out this Buzz Blog article here. | Raymond Matt, CFP, CLU, TEP, CHS

Canadian International Trade Minister Confirms Trans-Pacific Partnership

“The federal government has announced it has formally joined talks on the Trans-Pacific Partnership, a vast trade deal that Ottawa hopes will open new markets to Canadian exports. Negotiations on the Trans-Pacific Partnership — or TPP — involve 11 countries with a combined population of 658 million people and combined GDP of $20.5 trillion,” a CBC News online article wrote earlier this week. The article continued, “Canada had lobbied to join the talks for several months and was invited along with Mexico to take part in June. A 90-day notification period imposed by the U.S. Congress expired on Monday, and other member governments had to approve Canada and Mexico’s invitations to the talks, which have been under way for more than 2½ years. International Trade Minister Ed Fast, who is leading a trade mission to the Middle East this week, confirmed Tuesday that Canada has now joined the negotiations. In a written statement, Fast called the TPP ‘a 21st-century agreement that advances Canadian interests.'” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

CIBC poll suggests Canadians utilize trusts

“More than half of Canadians (55%) have written a will, but very few have included trusts as part of their estate plans, says a new CIBC poll,” an article posted to last week stated. The article continued, “It suggests clients should research the vehicles, as they can potentially save taxes by using them, as well as speed up the transfer of their assets upon death. In essence, a trust lets investors transfer assets to a beneficiary under certain terms and conditions; they can outline how and when the funds can be spent, says Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth Management. ‘You can indicate in the trust document that the money should be used to pay for school tuition, for example, rather than to buy a sports car.’ Additionally, he says a trust is considered to be a separate individual for tax purposes. ‘For a testamentary trust, any income earned on assets is taxed at the same graduated tax rates as an individual. This can yield savings that compound every year.'” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

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