What a year!  

If you have followed my blog post long enough, you would have known about our charity – Hamilton Basket Brigade.  

We got a large quantity of shoe donation from a wholesaling company that’s shutting down.  As a family, together with the help of our charity co-founder Roger Auger, we picked up 25 BIG boxes over the weekend.  

With the help of our team, we were able to sort all the shoes for school donation this past week.   Our office was a mess, but our team had the BEST XMAS party ever.  

I’m so grateful to be surrounded by all the generous people.  

As we are slowly winding down for the Christmas holiday, there are a few reminders that I want to share with all of you.

Tax loss harvesting

It can be because I’m the founder of Stock Hacker Academy, it can be because I am trading as well.  I get a lot of questions about stock trading taxation. 

Stock option taxation is complicated. 

Many of my clients made a killing trading stock option during the pandemic.  Many people hit the 6 figures return this year.  

P.S. if you want to find out how these people made a killing, we have a Christmas promotion running right now… It’s our end of year blowout sale (meaning HUGE DISCOUNT). You can start where they started.

If you are one of these people who made a killing in the stock market, you might want to investigate your current holding and see if there are any losing positions right at this moment.  

You might want to realize the loss NOW. 😊

If you are a real estate investor who sold your property this year and made a fortune, it might be worthwhile realizing some capital loss in your stock portfolio.  

By realizing the capital loss in your portfolio, you can offset the capital loss against the capital gain that you have made. 

You might still be optimistic about the future of the stock, can you realize the loss and buy back the stock right away?

Unfortunately, the answer is a no. 

You cannot realize the loss, then buy back the stock the next day.  CRA would deem it as “superficial loss” and disallow the capital loss you just realize.  

You can, however, buy it back after a 30 day period. 

Can you realize the loss in your regular trading account (non-registered) and buy back the stock in your TFSA or RRSP account?

Unfortunately, the answer is still a no.  ☹  They can still disallow your capital loss. 

Can you realize the loss in your personal trading account and buy back the same stock in a corporation account?

Unfortunately the answer is no, especially if the corporation is fully owned by you or your spouse.  You cannot buy back the identical stock in a different entity. 

For those stock option traders there, you might wonder, can you roll a losing option to a different expiry date and avoid superficial loss?

Superficial loss rule applies when an investment is sold and the same or identical property is repurchased within 30 days.  

Rolling a losing option (meaning selling an option and repurchasing another one with a different strike price and expiry date), chances are, the option sold and the option purchased aren’t considered the same or identical property.  

Chances are, superficial loss rule will not apply. 

CEBA loan expanded 

CEBA loan is finally expanded. 

For those of your who are unaware of what CEBA loan is, it is basically a government interest free loan that is available to qualified small business owners to apply. 

To qualify for the CEBA loan, you will have to either 

  1. Have T4 of $20K in 2019, or
  2. Incurred $40K qualified non-deferrable expenses in 2020

The interest free loan has been increased from $40K to $60K. 

If you have already got y our $40K approved, all you would need to do is to go back to your online banking platform, hit a few button, and you will be able to qualify for the additional $20K. 

Out of the $60K loan, $20K will be waived if you repay $40K by the end of December 2022. 

Commonly asked question: 

If you a real estate investor and own your residential rental in your personal name and you do not have a business number registered, chances are, you won’t be able to qualify. 

If you are a real estate investor that owns your properties in a corporation, chances are, you can qualify.  Make sure you speak to your accountant to understand it. 

If you are a real estate agent and does not have a business bank account, you might be able to qualify now.  For our clients, we have already prepared a video on how to apply without the bank account.  

Home office expense deduction

It’s COVID year.  Many of us work from home. 

In the past, if you want to deduct home office expense, you need a form filled out by your employer declaring that you have worked from home for certain % of your time. 

That form is T2200. 

CRA decided to give a break to taxpayers and employers this year and provided a simplified process for home office expense deduction, provided that you, as the employee, meets the following criteria:

  • You worked from home in 2020 due to COVID-19 pandemic or your employer required y ou to work from home
  • You worked more than 50% of the time from home for a period of at least 4 consecutive weeks in 2020
  • Have a completed signed T2200 from your employer (if you use detailed method to claim, not required if you use simplified method)
  • The expenses are used directly in your work during the period. 

To use the temporary flat rate method, you are eligible to claim $2 for each day you worked from home up to a maximum of $400 annually.   If you use the flat rate method, no receipts are required.  😉

Of course, you can always find out more from CRA’s website

Until next time, happy Canadian Real Estate Investing. 

Cherry Chan, CPA, CA

Your Real Estate Accountant

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