July 2021 Newsletter

Overview 

There are special rules under the Income Tax Act (the “Act”) that apply to transfers of property to a non-arm’s length person. The rules, discussed below, can override the actual proceeds or sales price received on the transfer.

When you sell a capital property for less than your adjusted cost base, you will have a capital loss. One-half of the capital loss is an allowable capital loss, and offsets any taxable capital gains that you have. 

Normally, if you receive a dividend from a corporation, it is paid in cash. But sometimes, the corporation will issue you more shares as the dividend instead of cash. In this case, it is called a stock dividend (“stock” and “share” have the same meaning and are used interchangeably).

As the name implies, the medical expense credit can provide a tax break for medical expenses that you and your family incur. 

The mechanics of the credit are explained below. But first, a couple of things to note.