Modern Axis CPA

Modern Axis CPA ModernAxis in Victoria, BC offers expert corporate accounting and tax services, including bookkeeping, tax planning, filings, and business advisory.

We use advanced technology to streamline processes, and minimize tax liabilities for your business

Do you own a US LLC, a US C-corp, or any non-resident company with at least 10% equity?If yes, you have a Form T1134 fil...
07/15/2026

Do you own a US LLC, a US C-corp, or any non-resident company with at least 10% equity?

If yes, you have a Form T1134 filing obligation in Canada. The form reports the foreign affiliate's existence, control structure, and financials — but does not assess any tax of its own.

The catch: a US LLC is treated as a corporation under Canadian tax law (the CRA doesn't recognize US "disregarded entity" status), so single-member US LLC owners are caught from day one. Filing deadline is 10 months after year-end — much earlier than the regular tax returns.

Late filing penalties start at $25/day capped at $2,500, escalate to $12,000 for gross negligence, and can reach 5% of the affiliate's cost amount after 24 months of non-compliance.

👉 https://modernaxis.ca/blog/t1134-foreign-affiliates-reporting

If you own a foreign corporation, when did you last file a T1134?

Do US stocks held in a Canadian brokerage account need to be reported on the T1135?Yes — if the total cost of all your s...
07/13/2026

Do US stocks held in a Canadian brokerage account need to be reported on the T1135?

Yes — if the total cost of all your specified foreign property exceeds CAD $100,000 at any time in the year. The rule is residence of the issuer, not the exchange or the currency. Apple, Microsoft, US-listed ETFs (VOO, VTI, QQQ) all count, even in a Canadian-dollar account at TD Direct Investing, Wealthsimple, or Questrade.

What does NOT count: anything in your RRSP, TFSA, FHSA, RRIF, RESP, or RDSP — registered accounts are exempt. And Canadian-domiciled ETFs that hold US assets (XSP, VFV, ZSP) are exempt because the issuer is Canadian.

Missing the T1135 triggers a $25-per-day penalty up to $2,500. Gross negligence can escalate to $12,000.

👉 https://modernaxis.ca/blog/t1135-foreign-property-reporting

If you hold US-listed shares outside a registered account, when did you last check that you're filing your T1135?

How are spousal and child support taxed in Canada?Spousal support paid periodically is taxable to the recipient and dedu...
07/08/2026

How are spousal and child support taxed in Canada?

Spousal support paid periodically is taxable to the recipient and deductible to the payer. Child support — for any order dated May 1, 1997 or later — is neither taxable nor deductible.

That's the simple rule. The complications are everywhere around it: lump-sum payments are treated as capital settlements (not deductible), pre-1997 orders are grandfathered to the old regime unless changed, legal fees to establish or enforce support are deductible to the recipient, and the CCB in shared custody is calculated on individual income rather than family income.

👉 https://modernaxis.ca/blog/spousal-child-support-tax-canada

If you're paying or receiving support under a written agreement, when did you last update your marital status with CRA?

Does Canada have an inheritance tax?No. Beneficiaries do not pay tax on inherited cash, property, or other assets receiv...
07/06/2026

Does Canada have an inheritance tax?

No. Beneficiaries do not pay tax on inherited cash, property, or other assets received as gifts or bequests.

But the estate pays. When a Canadian dies, capital property is deemed disposed of at fair market value under subsection 70(5) of the Income Tax Act — and the resulting capital gains are taxed on the deceased's terminal return before distribution. The biggest exception is the spousal rollover, which defers the tax to second death when property passes to a surviving spouse.

Probate fees are separate — a provincial levy on the value of the estate, ranging from $0 in Manitoba to ~1.4% with no cap in BC.

👉 https://modernaxis.ca/blog/inheritance-tax-canada-guide

If you're the executor of an estate, when did you last check the named beneficiaries on the deceased's RRSPs?

Should you contribute to RRSP, FHSA, or TFSA in 2026?The 2026 limits: $33,810 RRSP (18% of earned income), $8,000 FHSA, ...
07/01/2026

Should you contribute to RRSP, FHSA, or TFSA in 2026?

The 2026 limits: $33,810 RRSP (18% of earned income), $8,000 FHSA, $7,000 TFSA. For a first-time home buyer, all three open up the most powerful tax-advantaged stack in Canadian personal finance.

The FHSA is the structural winner for first-home savings — deductible going in (like an RRSP), tax-free coming out for a qualifying home purchase (like a TFSA). And if you don't end up buying, it transfers to your RRSP without using RRSP room.

Stack the FHSA + the Home Buyers' Plan and you have up to $100,000 of pre-tax-favoured money per first-time buyer.

👉 https://modernaxis.ca/blog/rrsp-vs-fhsa-vs-tfsa-comparison

If you're a first-time buyer who hasn't opened the FHSA yet, what are you waiting for?

The lowest federal tax rate dropped from 15% to 14% effective July 1, 2025 — and applies for the full 2026 tax year.That...
06/29/2026

The lowest federal tax rate dropped from 15% to 14% effective July 1, 2025 — and applies for the full 2026 tax year.

That means every non-refundable credit tied to the lowest rate (basic personal amount, age amount, disability amount, spousal credit, charitable donations under $200, medical expenses) is now multiplied by 14% instead of 15% — worth 6.67% less per dollar of underlying amount than at 15%.

For owner-managers, the integration math behind salary vs dividends tilts marginally toward dividends.

👉 https://modernaxis.ca/blog/canada-tax-brackets-2026

If you make the same income in 2026 as in 2024, how much less federal tax will you owe at the 14% rate?

How much will the federal government deposit into an RDSP for a child or adult dependant with DTC approval?Up to $90,000...
06/24/2026

How much will the federal government deposit into an RDSP for a child or adult dependant with DTC approval?

Up to $90,000 over their lifetime — $70,000 from the Canada Disability Savings Grant (matching family contributions) plus $20,000 from the Canada Disability Savings Bond (paid to low-income families without any contribution needed).

The sweet spot for families below the $114,750 income threshold: $1,500 of family contributions converts $3,500 of CDSG every year. And unused entitlement from prior years (up to 10) can be carried forward.

👉 https://modernaxis.ca/blog/rdsp-canada-grants-bonds-guide

If your family has DTC approval but no RDSP, why hasn't the plan been opened yet?

What does an approved Form T2201 actually unlock?The disability tax credit itself reduces federal tax by about $1,448 a ...
06/22/2026

What does an approved Form T2201 actually unlock?

The disability tax credit itself reduces federal tax by about $1,448 a year. That's the obvious number. The bigger number sits behind it.

DTC approval is the gate to the RDSP (up to $90,000 of government grants and bonds), the Canada Disability Benefit, the Child Disability Benefit, the Home Accessibility Tax Credit, and the Canada Caregiver Credit. And it's retroactive up to 10 prior tax years.

Most denials come from Part B wording — not from whether the impairment qualifies.

👉 https://modernaxis.ca/blog/disability-tax-credit-canada-guide

If your family has lived with a long-term impairment without an approved T2201 on file, when did the form last get reviewed by a CPA?

Five things every Canadian high-income taxpayer should know about the **2024 AMT reform**:**1) The rate is now 20.5% fed...
06/16/2026

Five things every Canadian high-income taxpayer should know about the **2024 AMT reform**:

**1) The rate is now 20.5% federal (up from 15%) on the broadened AMT base.** The basic exemption is ~$173,000 (indexed annually, set at the bottom of the 4th federal bracket — up from $40,000). The higher exemption keeps most middle-bracket taxpayers out, focusing AMT on high earners using credit-driven tax-efficient strategies.

**2) Capital gains are 100% included for AMT, not 50%.** The regular tax base includes only 50% of capital gains; for AMT, the full gain flows to Adjusted Taxable Income. The Lifetime Capital Gains Exemption is also significantly restricted in the AMT calculation. A QSBC sale claiming the full LCGE can produce minimal regular tax but substantial AMT.

**3) The donation tax credit is HALVED for AMT.** Only 50% of the regular credit applies. The combination of 100% capital gain inclusion + 50% donation credit means a large in-kind donation of appreciated publicly traded securities — which under section 38(a.1) zeros out the capital gain for regular tax — can still trigger material AMT. This is the change that hit high-income philanthropic households hardest in 2024.

**4) Stock options are now taxed like ordinary income for AMT.** Paragraph 110(1)(d) gives a 50% deduction from the option employment benefit for regular tax. That deduction is denied for AMT — the full option benefit flows to ATI. Employees with material stock option exercises should model AMT in the year of exercise.

**5) AMT is a timing tax (mostly).** The excess of AMT over regular tax becomes a carry-forward usable against regular tax in the next 7 years. For working-age earners with sustained high income, AMT usually gets absorbed. For retirees, estates, and one-time-event taxpayers whose future regular tax is materially smaller, the carry-forward may expire unused — making AMT a permanent extra tax.

Full guide — old vs new AMT side by side, the 6-step federal calculation, who actually pays now, and the planning levers for spreading events across years:

https://modernaxis.ca/blog/amt-reform-canada-2024

Four things every Canadian owner-manager paid in dividends should know:**1) Canada's dividend system has two tiers — eli...
06/09/2026

Four things every Canadian owner-manager paid in dividends should know:

**1) Canada's dividend system has two tiers — eligible and non-eligible.** Eligible dividends flow from corporate income taxed at the general rate (~27% combined in BC); non-eligible dividends flow from income that benefited from the small business deduction (~11% combined in BC). Eligible dividends carry a 38% gross-up and a 15.0198% federal tax credit; non-eligible dividends carry 15% gross-up and 9.0301% federal credit. The personal-tax difference at the top BC bracket is roughly 36% (eligible) vs 49% (non-eligible).

**2) GRIP is the running pool that allows eligible dividends.** Every CCPC has a General Rate Income Pool — a notional balance under subsection 89(1) that grows from income taxed at the general corporate rate (typically active business income above the $500,000 SBD threshold). It's calculated each year on Schedule 53 of the T2. A CCPC with no GRIP can only pay non-eligible dividends, no matter how much retained earnings it has.

**3) The eligible designation must be made on time.** Under subsection 89(14), the corporation designates a dividend as eligible by notifying each shareholder in writing (or posting on the corp's website) at the time the dividend is paid. The designation is in the directors' resolution. Late designation = the dividend is reclassified as non-eligible — regardless of the GRIP balance.

**4) Over-designating triggers Part III.1 tax.** Designating more eligible dividends than your GRIP balance triggers section 185.1 tax at 20% of the excess. The escape — subsection 185.1(2) — lets the corporation elect within 90 days (with shareholder consent) to recharacterise the excess as a non-eligible dividend. Same logic as the Part III escape on excess CDA elections, but at a lower 20% rate.

Full guide — the two-pool / two-dividend math, integration at top and lower brackets, the sequencing logic across multiple shareholders, GRIP / LRIP / RDTOH interplay, and Schedule 53 mechanics:

https://modernaxis.ca/blog/eligible-vs-non-eligible-dividends-grip-lrip

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