Archived

This page has been archived on the Web.

ARCHIVED - 1997 General Income Tax Guide

Total income

You have to include in income most amounts you received in 1997. This includes amounts from employment, pensions, self-employment, and other sources.

However, some amounts you may have received in 1997 are not taxed.

Do not include any of the following amounts in your income:

• any GST/HST credit and federal Child Tax Benefit payments;
• any provincial child tax credits or benefits;
• allowances for newborn children received from the Régie des rentes du Québec, or Quebec family allowances;
• compensation received from a province or territory if you were a victim of a criminal act or a motor vehicle accident;
• lottery winnings or inheritances; or
• any allowance, disability pension, or dependants' pension paid for war service.

Note
Income earned on any of the above amounts is taxable (such as interest you earn when you invest lottery winnings).

Loans and transfers of property

You may have to report any income, including dividends (see line 120) or interest (see line 121), from property (including money and any replacement property) you either:

• loaned to your spouse, parent, grandparent, child, grandchild, brother, or sister, or to your niece or nephew who was under 18 at the end of 1997; or
• transferred to your spouse or to your child, grandchild, sister, brother, niece, or nephew who was under 18 at the end of 1997.

You may also have to report capital gains (see line 127) or losses from the disposition of property you loaned or transferred to your spouse.

For details, get Interpretation Bulletin IT-510, Transfers and Loans of Property made after May 22, 1985 to a Related Minor, or IT-511, Interspousal and Certain Other Transfers and Loans of Property.

Tax shelters

To claim deductions or losses from tax shelter investments, attach to your return a completed Form T5004, Statement of Tax Shelter Loss or Deduction. Make sure your form shows the tax shelter identification number.

Line 101 - Employment income

Enter the total of amounts shown in box 14 of all your T4 or T4 Short slips. If you have not received your T4 or T4 Short slip by early April, or if you have any questions about an amount on a slip, contact your employer.

If you have employment expenses, see line 229 for details.

Note
If you received a housing allowance as a cleric, the allowance may be included in box 14 of your T4 slip. If so, subtract the amount of the allowance from the amount in box 14, and include the difference on line 101. Include the allowance on line 104.

Tax Tip
Your contributions to the Canada or Quebec Pension Plan (box 16 or 17 of your T4 or T4 Short slips) determine the amount of benefits you will receive under either of these plans. If there are no contributions in box 16 or 17 of your T4 or T4 Short slips, or if you have any questions about the amount of your contributions, contact your employer.

Commissions (box 42)

Enter on line 102 the total commissions you received as an employee from box 42 on all your T4 or T4 Short slips. This amount is already included in your income on line 101, so do not add it again when you calculate your total income on line 150. If you have commission expenses, see line 229 for details.

If you are a self-employed commission salesperson, get the income tax guide called Business and Professional Income to determine how to report your commission income and claim your expenses.

Line 104 - Other employment income

Include your total employment income not reported on a T4 or T4 Short slip, such as tips and foreign employment income (in Canadian dollars).

Note
If you have employment income from the United States, the amount on your W-2 slip may have been reduced by contributions to a "401(k) plan." Those contributions are not deductible on your Canadian return. Therefore, you have to add this amount into your income as well.

Tax Tip
You may be able to contribute to the Canada or Quebec Pension Plan for tips you received through employment. See line 310 for details.

Also, include on this line the total of the following amounts:

• royalties you received from a work or invention of yours, if they are included in box 28 of your T4A slip (report on line 121 any royalties shown on your T5 slip);
• amounts you received under a supplementary unemployment benefit plan (a guaranteed annual wage plan);
• the taxable benefit included in box 28 of your T4A slip for premiums paid to cover you under a group term life-insurance plan;
• amounts allocated to you under a profit-sharing plan (box 35 of your T4PS slip);
• any cleric's housing allowance you received (which you may be able to deduct on line 232);
• net research grants you received (as explained below);
• the taxable part of income-maintenance insurance-plan payments you received, such as income from a wage-loss replacement plan (as explained below); and
• certain goods and services tax/harmonized sales tax (GST/HST) and Quebec sales tax (QST) rebates you received (as explained below).

Research grants - Subtract your expenses from any research grant you received and enter the net amount on this line. Your expenses cannot be more than the grant you received. Attach to your return a list of your expenses. For details, get Interpretation Bulletin IT-75, Scholarships, Fellowships, Bursaries, Prizes, and Research Grants.

Wage-loss replacement plans - Box 28 of your T4A slip includes the payments you received from these plans. There should also be a note on the slip identifying them. You may not have to report the full amount on your tax return. You can reduce the payments you received by the contributions you made to the wage-loss replacement plan after 1967, if you did not use the contributions on a previous year's return to reduce the income you had to report. For more information, get Interpretation Bulletin IT-428, Wage Loss Replacement Plans.

GST/HST and QST rebates - If you are an employee who paid and deducted employment expenses in 1996 or earlier, you may have received a GST/HST or QST rebate in 1997 for those expenses. If so, you include on line 104 the rebate you received. However, a rebate for a vehicle or musical instrument you bought, for which you can claim capital cost allowance, is treated differently. The income tax guide called Employment Expenses contains instructions on how to report such rebates and information about capital cost allowance.

Line 113 - Old Age Security pension

Include the amounts from box 18 of your T4A(OAS) slip, and box 24 of your T4A(P) slip, if applicable. Do not include on line 113 the amount in box 21 of your T4A(OAS) slip. For details on how to report this income, see line 146. If you do not have your T4A(OAS) or T4A(P) slip, contact the nearest Income Security Programs office of Human Resources Development Canada.

Note
If your net income before adjustments (line 234) is more than $53,215, you may have to repay all or a part of your OAS benefits. See line 235 for details.

If, at any time in 1997, you were a non-resident of Canada receiving OAS benefits, you also have to complete Form T1136, Old Age Security Return of Income. For more details, get this return and the related guide.

Line 114 - Canada or Quebec Pension Plan benefits

Enter the total Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits shown in box 20 of your T4A(P) slip. This amount is the total of the amounts in boxes 14 to 18. If your T4A(P) slip has an amount in box 16, 17, or 18, read the part of this section that applies to you.

CPP or QPP lump-sum benefits - If you received a lump-sum CPP or QPP benefit in 1997, all or part of it may have been for a year before 1997. This amount is already included on your T4A(P) slip, and you have to report all of it for 1997. However, under proposed changes, you may be eligible for a more beneficial tax treatment. If the part that relates to a previous year is $300 or more, you may have that part taxed as if you had received it in the previous year. We will automatically apply the tax calculation that benefits you most. We will tell you the results on your Notice of Assessment or Notice of Reassessment.

You may have received a lump-sum CPP or QPP benefit in 1996 (other than a disability benefit) of which $300 or more relates to 1995 or previous years. If so, you may not have received the more beneficial tax calculation for that payment. To receive this tax calculation, call Human Resources Development Canada, at 1-800-277-9914, to get a statement that shows how much of the payment applies to each previous year, and then ask us to adjust your 1996 return. For more details on how to do this, see "How do you change your return?" on page 9.

Note
We applied the more beneficial tax treatment automatically to lump-sum disability benefits paid in 1996.

CPP or QPP disability benefit (box 16)

Enter on line 152, located below and to the left of line 114, the amount of your CPP or QPP disability benefits from box 16. This amount is already included in your income on line 114, so do not add it again when you calculate your total income on line 150.

Lump-sum CPP or QPP disability benefits you received in 1997 already qualify for the special tax treatment discussed under "CPP or QPP lump-sum benefits" above.

CPP or QPP child benefit (box 17)

Include a child benefit only if you received it because you were the child of a deceased or disabled contributor. Any benefits paid for your children are their income, even if you received the payment.

CPP or QPP death benefit (box 18)

As a beneficiary of the estate of the deceased person, you can choose to include this amount either on line 114 of your own return, or on a Trust Income Tax and Information Return for the estate. Do not report it on the deceased person's individual return. The taxes payable may be different, depending on which return you use. For more information, get the income tax guide called T3 Guide and Trust Return.

Line 115 - Other pensions or superannuation

Include on this line any other pensions or superannuation you received (box 16 on T4A slips and box 31 on T3 slips). If there is a lump-sum amount shown in box 18 of your T4A slip or box 22 of your T3 slip, report it on line 130.

You may also have to report on this line other amounts that you received. Read the parts of this section that correspond to the type of income you have.

Tax Tip
If you have to report your pension or annuity payments on line 115, you may be able to claim the pension income amount. See line 314 for details.

Annuity and registered retirement income fund (RRIF) payments

If you have an amount in box 24 of your T4A slip, box 16 or 20 of your T4RIF slip, or box 19 of your T5 slip, report the amount as follows:

• If you were 65 or older on December 31, 1997, or you received it at any age because your spouse died, include it on line 115.
• Otherwise, report the amount in box 24 of your T4A slip, or box 16 or 20 of your T4RIF slip on line 130. Report the amount in box 19 of your T5 slip on line 121.

Note
If there is an amount in box 18 or 22 of your T4RIF slip, see the instructions on the back of the slip.

Pensions from a foreign country

Report in Canadian dollars the total amount of your 1997 foreign pension income. Do not deduct from your foreign income the amount of tax the foreign country withheld. See "How do you report foreign income and other amounts?" on page 9. Attach a note to your return, identifying the type of pension you received and where it came from.

You may have to report amounts you received from United States individual retirement accounts (IRAs). For details, contact us.

Tax Tip
You can claim a deduction on line 256 for the part of your foreign pension income that is tax-free under a tax treaty. If you do not know whether any part of your foreign pension is tax-free in Canada, contact us.

United States social security - Include on line 115 the full amount, in Canadian dollars, of your U.S. social security benefits. You can claim a deduction for this income. See line 256 for details.

Benefits paid for your children are their income, even if you received the payments.

Line 119 - Employment Insurance benefits

Enter the amount shown in box 14 of your T4E slip. If you repaid to Human Resources Development Canada excess benefits you received, you may be entitled to a deduction. See line 232 for details.

Note
If your net income before adjustments (line 234) is more than $39,000, you may have to repay some of the benefits you received. See line 235 for details.

Line 120 - Taxable amount of dividends from taxable Canadian corporations

Enter on line 120 the taxable amount of all dividends from taxable Canadian corporations, as shown in box 11 on T5 slips, box 31 on T4PS slips, box 32 on T3 slips, and in the details area on T5013 slips.

If you received foreign dividends, see "Foreign interest and dividend income" on page 16 for details on how to report this income.

How to report

Enter the taxable amount of your dividendsfrom taxable Canadian corporations in Part I of Schedule 4. You have to report your dividends even if you did not receive an information slip. If you did not receive one, you can calculate the taxable amount of dividends you received by multiplying the dividends you actually received by 125%.

Taxable dividends received from taxable Canadian corporations qualify for the federal dividend tax credit. This credit reduces the amount of tax you owe. Complete Method B of Schedule 1 to claim this credit. See "Line 425 - Federal dividend tax credit" on page 45 for details.

Note
Special rules apply for income from property (including shares) one family member lends or transfers to another. See "Loans and transfers of property" on page 12 for more information.

Tax Tip
In some cases, it may be better for you to report all the taxable dividends your spouse received from taxable Canadian corporations. You can only do this if, by including the dividends in your income, you will be able to claim or increase your claim for the spousal amount (see line 303).

If you use this option, you may be able to take better advantage of the dividend tax credit. Also, do not include these dividends in your spouse's income when you calculate claims such as the spousal amount on line 303 or amounts transferred from your spouse on Schedule 2.

Line 121 - Interest and other investment income

Include on this line your interest from Canadian sources, and interest and dividend income from foreign sources. You also include the interest on any income tax refund you received in 1997, which is shown on your Notice of Assessment or Notice of Reassessment.

Report the amounts you actually received, as well as amounts that were credited to you in the year. The interest you report depends on the type of investment and when you made it.

Note
Special rules apply for income from most property (including money) one family member lends or transfers to another. See "Loans and transfers of property" on page 12 for more information.

Generally, when you invest your money in your child's name, you have to report the income from those investments. However, if you deposited Child Tax Benefit payments into a bank account or trust in your child's name, the interest earned on those payments is your child's income.

How to report

Use Part II of Schedule 4 to list your investments, and attach copies of any information slips. Generally, you report your share of interest from a joint investment based on how much you contributed to the investment.

Example
Karen and Pavel received a T5 slip from their joint bank account showing the $400 interest they earned in 1997. Karen had deposited $4,000 and Pavel had deposited $1,000 into the account.

Karen reports $320 interest, calculated as follows:

$4,000 (her share) × $400 (total interest) = $320
$5,000 (total)

Pavel reports $80 interest, calculated as follows:

$1,000 (his share) × $400 (total interest) = $80
$5,000 (total)

To determine the amounts you have to report, read any of the following sections that apply to you:

• Bank accounts
• Term deposits, guaranteed investment certificates (GICs), and other similar investments
• Canada Savings Bonds (CSBs)
• Treasury bills (T-Bills)
• Earnings on life insurance policies
• Foreign interest and dividend income

Bank accounts

Report interest paid or credited to you in 1997, even if you did not receive an information slip. You may not receive a T5 slip for amounts under $50.

Term deposits, guaranteed investment certificates (GICs), and other similar investments

On these investments, interest builds up over a period of time, usually longer than one year. Generally, you do not receive the interest until the investment matures, or you cash it in. For more information on Canada Savings Bonds, see "Canada Savings Bonds (CSBs)" below.

For most investments you made in 1990 or later, you have to report the interest each year, as you earn it.

The amount of income you report is based on the interest you earned during each complete investment year. For example, if you made a long-term investment on July 1, 1996, calculate the first year's interest to the end of June 1997 and report it on your 1997 tax return. Report the interest from July 1997 to June 1998 on your 1998 return.

Note
Your investment agreement may specify a different interest rate each year. If so, report the amount on your T5 slip, even if it is different from what the agreement specifies, or what you received. The issuer of your investment can tell you how this amount was calculated.

For information about reporting methods for investments (including CSBs) made in 1989 or earlier, call our T.I.P.S. ( Info-Tax ) service. See the T.I.P.S. information in the forms booklet.

Canada Savings Bonds (CSBs)

Interest on a CSB designated by the letter "R," for regular interest, is paid annually until the bond matures, or you cash it in. Interest on a bond designated by the letter "C," for compound interest, is not paid until you cash it in.

Tax Tip
If you bought bonds through your payroll savings plan, you can deduct the interest charges you paid to buy the bonds. See line 221 for details.

How to report

"C" bonds, Series 45 and subsequent, and all "R" bonds - Report the amount shown on the T5 slip.

"C" bonds, Series 42 to 44 (1987-1989) - The rest of this section applies only to these bonds. If you are already using the annual accrual method to report your bond interest on these bonds, complete Chart 1 on page 16.

Chart 1
Interest to report for "C" bonds using the
annual accrual method

For each series:	Series 42	Series 43	Series 44
A - Face value of bonds
B - Amount from line A divided by 100	=	=	=
C - Interest amount	× 15.05	× 13.81	× 12.53
Line B × Line C Include this amount on line 121	=	=	=

If you want to change to the annual accrual method, complete Chart 2 to calculate the amount to report.

Chart 2
Interest to report for "C" bonds if you want to change
to the annual accrual method

For each series:	Series 42	Series 43	Series 44
A - Face value of bonds
B - Amount from line A divided by 100	=	=	=
C - Interest amount	× 15.05	× 35.78	× 23.10
Line B × Line C Include this amount on line 121	=	=	=

If you already use the cash or receivable method, you have to report the interest at least every three years. Using this method, you should have reported the following amounts of interest for each $100 of bonds:

• For Series 42 bonds, you should have reported $33.19 on your 1990 return, $34.90 on your 1993 return, and $32.57 on your 1996 return. These bonds matured in 1997 and will not earn any more interest. Regardless of which method you were using to report the interest you earned on them, for 1997 you have to report all the interest these bonds have ever earned, minus the amounts you reported in previous years.
• For Series 43 bonds, you should have reported $35.33 on your 1991 return and $26.78 on your 1994 return. You should report $35.78 on your 1997 return.
• For Series 44 bonds, you should have reported $32.05 on your 1992 return and $24.48 on your 1995 return.

If you cashed Series 42, 43, or 44 "C" bonds in 1997, report the amount shown on the T600 slip minus any part of that amount that you reported in previous years. To calculate the amount you should have reported for each $100 of bonds, use Chart 3 below.

Chart 3
Interest already reported for each $100 of
"C" bonds cashed before maturity

For each series:	Series 42	Series 43	Series 44
Annual accrual method	100.66	84.09	67.10
Cash or receivable method	100.66	62.11	56.53

Treasury bills (T-Bills)

If you disposed of a T-Bill at maturity in 1997, you have to report as interest the difference between the price you paid for it and the proceeds of disposition shown on your T5008 slip, Statement of Securities Transactions, or account statement.

If you disposed of a T-Bill before maturity in 1997, you may also have to report a capital gain or loss. For details, get the income tax guide called Capital Gains.

Earnings on life insurance policies

Report the earnings which have accumulated on certain life insurance policies in the same way as you do for other investments. In all cases, your insurance company will send you a T5 slip.

For policies bought before 1990, you can choose to report accumulated earnings annually by telling your insurer in writing that you choose to do so.

Foreign interest and dividend income

Report gross foreign interest and dividend income in Canadian dollars. Do not deduct from your foreign income the amount of tax the foreign country withheld. For more information on how to convert your foreign income into Canadian dollars, see "How do you report foreign income and other amounts?" on page 9.

Tax Tip
If you paid foreign taxes on foreign investment income you received, you may be able to claim a foreign tax credit. See "Lines 431 and 433 - Federal foreign tax credit" on page 45 for details.

Line 122 - Net partnership income: Limited or non-active partners only

If you were a limited partner of a partnership that did not include a rental or farming operation, enter your share of the partnership's net income or loss on line 122.

If you were a partner (other than a limited partner) of a partnership that did not include a rental or farming operation, enter your share of the partnership's net income or loss on line 122 only if you were both:

• not actively involved in the partnership; and
• not otherwise involved in a business or profession similar to that carried on by the partnership.

Report your net rental income or loss from a partnership on line 126. Report your net farming income or loss from a partnership on line 141.

If none of the above applies to you, enter your share of the partnership's net income or loss on the applicable self-employment line of your return (see lines 135 to 143).

Note
If the partnership has a loss, the amount you can claim could be limited. For details, contact us.

If you have a tax shelter, see "Tax shelters" on page 12.

How to report

• Complete Part III of Schedule 4.
• Attach to your return a T5013 slip, Statement of Partnership Income. If you did not receive this slip, attach a copy of the partnership's financial statement. See lines 135 to 143 for more details.

Note
You may have to make Canada Pension Plan contributions on the net income you report on line 122. See line 310 for details.

Certified feature films and certified productions

You may have invested in a Canadian certified feature film or certified production for reasons other than to earn income from a business. If so, and if you want to claim capital cost allowance, you have to file with your return a T1-CP slip, Statement of Certified Productions, which the producer issues. Otherwise, we may disallow your claim. Use the back of the T1-CP slip to calculate your allowable claim.

Line 126 - Rental income

Generally, you report rental income payable to you in 1997. You have to include with your return a statement showing your rental income and expenses for the year. You can use Form T776, Statement of Real Estate Rentals, to help you calculate your net rental income.

Enter your gross rental income on line 160 and your net rental income or loss from real estate rentals on line 126. If you have a rental loss, show the amount in brackets. If you were a member of a rental partnership, you should also include any amount in box 20 of your T5013 slip, Statement of Partnership Income, or that the partnership allocated to you in its financial statements.

The income tax guide called Rental Income contains Form T776, as well as details on rental matters.

If you have a tax shelter, see "Tax shelters" on page 12.

Line 127 - Taxable capital gains

A capital gain or a capital loss usually occurs when you sell or dispose of property, such as real estate or shares. The taxable part of a capital gain is 75% of the net amount of your capital gains minus your capital losses for the year.

Under proposed changes, if you realized a capital gain after 1991 as a result of a mortgage foreclosure or conditional sales repossession, the capital gain is excluded from income when calculating your GST/HST credit, Child Tax Benefit payments, age amount (line 301), social benefits repayment (line 235) and refundable medical expense supplement (line 452). If this applies to you, contact us for more details.

When you donate capital property to a charity, we consider you to have sold the property at its fair market value. As a result, you may have to report a capital gain or loss for that property.

Under proposed changes, you will have to include in your income only 37.5% of certain capital gains. This applies to gains from certain property donated to any of the qualified donees listed under line 349 (other than a private charitable foundation) after February 18, 1997. The types of property affected are:

• shares, rights, and debt obligations that are listed on the Winnipeg, Montréal, Alberta, Toronto, Vancouver, or certain foreign stock exchanges;
• units of a mutual fund trust;
• shares of a mutual fund corporation;
• interests in related segregated fund trusts; and
• certain other debt obligations.

Attach to your return Form T1170, Capital Gains on Gifts of Certain Capital Property, providing details of each of these properties and when you donated it.

In addition, you may be able to claim a reserve for gains you realize on donations of non-qualifying securities to any qualified donee listed under line 349. For details on these changes, get the guide called Capital Gains and the pamphlet called Gifts and Income Tax.

How to report

Use Schedule 3 to calculate your taxable capital gains or allowable capital losses and attach the completed schedule to your return. If all of your gains or losses are shown on T3, T4PS, T5, or T5013 slips, or on a financial statement from a partnership, enter the total on line 174 of Schedule 3. If your securities transactions are indicated on an account statement, or a T5008 slip, use the information on these documents to help you complete Schedule 3. For more information about these and other capital dispositions, get the income tax guide called Capital Gains.

If you have a taxable capital gain, enter the amount from line 199 on Schedule 3 on line 127 of your return. If you have a net capital loss, complete Schedule 3 but do not claim it on line 127. You can only use it to reduce your taxable capital gains of other years. See the "Note" at line 253 for details on how to carry back your loss.

Tax Tip
You may be able to claim a deduction for the taxable capital gain you report. See line 254 for details.

Line 128 - Support payments received

The term "support" used in this section replaces the former references to "alimony" and "maintenance." It refers to both spousal and child support.

Enter on line 156 the total amount of spousal and child support you received in 1997. Enter on line 128 the taxable amount. For information about non-taxable amounts, see "Child support" on page 18.

Generally, the support payments you received are taxable, if all of the following conditions are met:

• When you received the payments, you and the person making the payments were living apart because of a breakdown in the relationship.
• The payments were made under a court order or written agreement.
• The payments were made to maintain you, your children, or both.
• The payments were an allowance to be paid periodically, such as monthly, quarterly, semi-annually, or annually.
• The payments were made to you or to someone else on your behalf.

Note
There are exceptions to these conditions. If you separated in 1997, or if you do not know whether the payments you received are taxable, get the pamphlet called Support Payments.

Child support

Generally, you do not have to include in your income child support that becomes payable after April 30, 1997, under a court order or written agreement dated May 1, 1997, or later. There may be an exception if your order or agreement recognizes such payments you received before May 1, 1997. For more information, see the pamphlet called Support Payments.

You do have to include in your income amounts received that became payable under orders and agreements dated before May 1, 1997, unless one of the following applies:

• The order or agreement provides that the amounts payable on or after a specific date (May 1, 1997, or later) will not be taxable to you.
• The order or agreement is amended after April 30, 1997, to vary the amounts payable on or after a specific date (May 1, 1997, or later).
• You and the payer jointly elect, using Form T1157, Election for Child Support Payments, that the new rules will apply as of a specific date (May 1, 1997, or later). For more information, see the pamphlet called Support Payments, which includes this form.

Note
You may be receiving both child support that is not taxable under the new rules and taxable spousal support. If so, and the child support is in arrears, you will not have to include in your income any spousal support payments until you receive all of the required child support.

You may have to register your court order or written agreement by using Form T1158, Registration of Family Support Payments. For more information, see the pamphlet called Support Payments, which includes this form.

Tax Tip
You may have to report support payments you received from a resident of another country. However, if the support payments are tax-free in Canada because of a tax agreement between Canada and the other country, you can claim a deduction for the payments on line 256. To find out if the payments you received are tax-free, contact us.

You may be able to claim a deduction for support income you repaid under a court order. For details, get the pamphlet called Support Payments.

Line 129 - Registered retirement savings plan (RRSP) income

Generally, you have to enter on line 129 the total amount shown in boxes 16, 18, 20, 22, 26, 28, and 34 of all your T4RSP slips. This is the case unless your spouse made a contribution to your RRSP. See "Spousal RRSPs" on page 18 for more details.

Tax Tip
Annuity payments shown in box 16 of your T4RSP slip may qualify for the pension income amount. See line 314 for more details.

Spousal RRSPs

Your spouse may have to report some or all of the RRSP income shown in boxes 20, 22, or 26 of your T4RSP slips if either:

• your spouse contributed to any of your RRSPs in 1995, 1996, or 1997; or
• you received a T4RSP slip that shows a yes in box 24 and either your spouse's name in box 38 or your spouse's social insurance number in box 36.

To calculate the amount from a spousal RRSP that each of you has to report, complete Form T2205, Calculating Amounts From a Spousal RRSP or RRIF to Include in Income. Both you and your spouse should include this form with your returns. Attach the T4RSP slip to your return. However, only the person whose name is shown on the slip as the annuitant can claim the income tax deducted (box 30).

Note
If you and your spouse were living apart because of a breakdown in the relationship when you withdrew funds from your RRSP, you have to report the whole amount shown on your T4RSP slips.

For more details on RRSP income, get the income tax guide called RRSPs and Other Registered Plans for Retirement.

Repayments under the Home Buyers' Plan (HBP)

If you withdrew funds from your RRSP under the HBP before 1996, you should have received a Home Buyers' Plan Statement of Account from us in the fall of 1996, indicating the amount of your annual repayment for 1997. You have to make this repayment by contributing to your RRSP on or before March 1, 1998, and designating it using line 246 of Schedule 7. Do not make the repayment to us. For more information, see "Home Buyers' Plan (HBP) repayments" on page 23.

If you have not made a repayment for 1997, you have to include the required repayment, as indicated on your repayment statement, on line 129 of your return. You also have to include an amount on line 129 if you repay less than the required repayment. For more details, get the pamphlet called Home Buyers' Plan (HBP) for the year you made your withdrawal.

Line 130 - Other income

Use this line to report taxable income that is not reported anywhere else on the return. Identify the type of income you are reporting in the space to the left of line 130 on your return. This will support any deductions you are entitled to claim against this income. If you have more than one type of income, attach a note to your return giving the details.

Note
Special rules apply for income from property one family member lends or transfers to another. See "Loans and transfers of property" on page 12 for more information.

Scholarships, fellowships, bursaries, study grants, and artists' project grants

Total all the amounts you received in 1997 (box 28 of your T4A slips).

• If they total $500 or less, do not report them.
• If they total more than $500, report on line 130 only the amount that is more than $500.

Example
Kimiko received a $1,500 scholarship to attend university. She subtracts the $500 tax-free amount and reports $1,000 on line 130.

Note
If you received an artists' project grant, you can subtract the $500 or your expenses, whichever you prefer, but not both. However, the expenses you claim cannot be more than the grant. You cannot claim personal living expenses while at your usual place of residence.

Report prizes and awards you received as a benefit from your employment or in connection with a business. However, these are not eligible for the $500 tax-free amount. If you received a research grant, see line 104.

For more information, get Interpretation Bulletin IT-75, Scholarships, Fellowships, Bursaries, Prizes, and Research Grants.

Lump-sum payments

Include lump-sum payments from pensions and deferred profit-sharing plans (box 18 of your T4A slips and box 22 of your T3 slips).

Retiring allowances (severance pay)

A retiring allowance includes an amount paid as severance pay. Include the amount shown in box 26 of your T4A slips.

Also, include any retiring allowance included in the amount in box 26 of your T3 slips. Details regarding the retiring allowance will be shown in box 36 and in the footnotes area of the slips.

Note
You may be able to deduct legal fees you paid to get a retiring allowance. See line 232 for details.

Tax Tip
You may be able to transfer part or all of your retiring allowances to your registered retirement savings plan (RRSP). See "Transfers" on page 22. However, if you make this transfer, you may have to pay minimum tax. See "Minimum tax" on page 40 for details.

Death benefits (other than Canada or Quebec Pension Plan death benefits)

A death benefit is an amount you receive, after a person's death, for that person's employment service. It is shown in box 28 of your T4A slips or box 35 of your T3 slips. You may not have to pay tax on up to $10,000 of the benefit you received.

If you are the only one to receive a death benefit, report the amount you receive that is more than $10,000. Even if you do not receive all of the death benefit in one year, the total tax-free amount for all years cannot be more than $10,000.

To find out what to report if anyone else also received a death benefit for the same person, call our T.I.P.S. ( Info-Tax ) service. See the T.I.P.S. information in the forms booklet.

Attach a note to your return stating the amount of death benefits you received but did not include in your income.

Registered education savings plans (RESPs)

Include on line 130 the total taxable payments you received from an RESP (box 26 of your T3 slips).

Under proposed changes, starting in 1998, the subscriber to an RESP may be able to receive the income portion of payments from an RESP. For more details, get the information sheet called Registered Education Savings Plans.

Other income

Also report the following amounts on line 130:

• amounts distributed from a retirement compensation arrangement;
• training allowances, Saskatchewan Pension Plan payments, or any other amount shown in box 28 of your T4A slips (other than royalties and the taxable benefit for premiums paid to cover you under a group term life-insurance plan, both of which you report at line 104);
• amounts from a trust (including an amateur athlete trust) shown in box 26 of your T3 slips;
• certain annuity payments (see line 115);
• income assistance payments you received as an employee under The Atlantic Groundfish Strategy (but if you received these payments because you were a self-employed fisher, report them on line 143); and
• any other type of taxable income that you are not reporting anywhere else on the return. If you are not sure whether it is taxable, contact us.

Lines 135 to 143 - Self-employment income

Enter on the appropriate line your gross and net income or loss from self-employment. If you have a loss, show it in brackets. Include with your return a statement showing your income and expenses. For more information contact theBusiness Enquiries section of your tax services office. For the address and telephone number, see the listings under "Revenue Canada" in the Government of Canada section of your telephone book.

If your fiscal period does not end on December 31, 1997, the guide called Reconciliation of Business Income for Tax Purposes, will help you calculate the business income to report on your 1997 return. If you filed Form T1139, Reconciliation of 1996 Business Income for Tax Purposes, with your 1996 return, you have to complete the 1997 version of this form and attach it to your return.

Note
You may have to make Canada Pension Plan contributions on your self-employment earnings. See line 310 for details.

The following income tax guides contain additional information and forms you may need to help you calculate your self-employment income:

• Business and Professional Income (Form T2124, Statement of Business Activities, and Form T2032, Statement of Professional Activities)
• Fishing Income (Form T2121, Statement of Fishing Activities)
• Farming Income (Form T2042, Statement of Farming Activities) or Farming Income and NISA (Form T1163 Statement A, NISA Account Information and Statement of Farming Activities for Individuals, and Form T1164 Statement B, NISA Account Information and Statement of Farming Activities for Additional Farming Operations)

Note
If you are participating in the net income stabilization account (NISA) program and you are filing a paper return, use the envelope contained in the guide called Farming Income and NISA.

If you use your home for day care, the pamphlet called Using Your Home for Day Care has more information.

Generally, if you were a limited or non-active partner, you enter your net income or loss on line 122. However, if your net income or loss is from a rental operation, you enter it on line 126. If it is from a farming operation, enter it on line 141.

If you were an active partner and received a T5013 slip, Statement of Partnership Income, report the amount from box 18 on the line of your return shown in box 12. This is your share of the partnership's income or loss. Also report the partnership's gross income as shown in box 31. Attach the T5013 slip to your return. If you did not receive this slip, you should attach the applicable self-employment form indicated above, or your financial statement.

If you have a tax shelter, see "Tax shelters" on page 12.

Line 144 - Workers' Compensation benefits

Enter the amount shown in box 10 of your T5007 slip. Claim a deduction on line 250 for the benefits you entered on line 144.

Line 145 - Social assistance payments

Enter the amount shown in box 11 of your T5007 slip, unless you lived with your spouse at the time either of you received the social assistance payments. In that case, the spouse with the higher net income on line 236 (without including these payments, or deducting the amounts on lines 214 or 235) has to report these payments, no matter whose name is on the slip. If you and your spouse have the same net income, whoever received the payments has to report them. If you received a Relevé 5 slip from the province of Quebec, the instructions on the back of the slip explain how to report this income.

Note
You may not have to include certain social assistance payments you or your spouse received for being a foster parent or for caring for a disabled adult who lived with you. However, if the payments are for caring for your spouse or an individual related to you or your spouse, you or your spouse (whoever has the higher net income) will have to include them. For more information, contact your tax services office.

Claim a deduction on line 250 for the social assistance payments you entered on line 145.

Line 146 - Net federal supplements

Enter the amount shown in box 21 of your T4A(OAS) slip.

If your net income before adjustments (line 234) is $53,215 or less, claim a deduction on line 250 for the net federal supplements you entered on line 146. If line 234 of your return is more than $53,215, contact us to find out how much you can deduct on line 250.

Previous

Next

Date modified:

2002-02-04