The tax-filing deadline is April 30. So you still have time to
take advantage of a variety of lesser-known credits, deductions,
and transfers that the Canada Revenue Agency doesn't exactly
advertise with ringing bells and flashing lights. Here are three of
my favourites of particular interest to higher-bracket taxpayers
1. The Equivalent-to-Spouse Tax Credit
This tax credit could add up to at least a $1,500 tax saving,
once you take federal and provincial taxes into account. You may be
able to claim it if:
You are divorced or legally separated (not supported by your
spouse), and you support a child under 18 in your home.
You are a single parent with a child under 18 living with
You are single and support a brother or sister under 18 living
You support an elderly parent who has moved in with you.
To claim the credit, you must be either unmarried or legally
divorced, maintain and live in your own residence, and have a
qualifying dependant who lives with you and is wholly dependent on
you for support during the year (the dependant may live away while
2. Transferring Dividends to Your Spouse
If your spouse has little or no income except for taxable
dividends from Canadian companies, you may be able to reduce the
family tax bill by including your spouse's dividends in your
While that may seem totally counterintuitive, doing so will help
reduce your tax if your spouse can't make full use of the
Dividend Tax Credit. However, you may do this only if the transfer
of dividends increases the claim you make for your spouse as a
dependant. Moreover, if you do decide to transfer dividends, you
have to include all of your spouse's dividend income from
These strategies can be effective in the right circumstances.
But everyone's tax situation differs in the particulars. The
best way to determine whether a transfer would work for you is to
consult a qualified tax specialist.
3. Claim Reserves for Capital Gains
If you have sold assets in 2014 and realized a capital gain, in
some cases you may be able to claim a capital gains reserve to
defer recognition of that capital gain for tax purposes.
You can claim a reserve if you sell a property but do not
receive all of the proceeds right away. An example of this would be
selling appreciated shares and taking back a promissory note as
Under the reserve rules, you need only recognize one-fifth of
the gain in the current and each later year (cumulatively), so that
the entire capital gain will be accounted for by the fourth year
after the year of sale.
If you are not able to claim a reserve because you received all
of the proceeds immediately on the sale, look to see if you have a
capital loss carryforward balance from previous years that can
offset your capital gain.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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