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In connection with the subject matter of this bulletin, the current version of one or more of the following bulletins may be of interest: IT-51 Supplies on Hand at the End of a Fiscal Period IT-153 Land Developers-- Subdivision and Development Costs and Carrying Charges on Land IT-165 Returnable Containers IT-283 Capital Cost Allowance-- Video Tapes, Videotape Cassettes, Films, Computer Software and Master Recording Media IT-302 Losses of a Corporation-- The Effect that Acquisitions of Control, Amalgamations, and Windings-up have on Their Deductibility-- After January 15, 1987 IT-328 Losses on Shares on Which Dividends Have Been Received IT-457 Election by Professionals to Exclude Work in Progress from Income IT-459 Adventure or Concern in the Nature of Trade IT-482 Capital Cost Allowance-- Pipelines IT-483 Credit Unions IT-501 Capital Cost Allowance-- Logging Assets IT-504 Visual Artists and Writers IT-526 Farming-- Cash Method Inventory Adjustments Appendix-- Depreciation in Inventory Assume Year 1 Year 2 Inventory at beginning of year $ 0 $ 20,000 Cost of sales 80,000 200,000 Inventory at end of year 20,000 25,000 Depreciation for year 5,000 10,250 Depreciation included in closing inventory 1,000 1,250 Net income for year per financial statements 50,000 90,000 Computing Net Income for Tax Purposes Net income for the year per financial statements $ 50,000 $ 90,000 Add: Depreciation included in opening inventory $ 0 $ 1,000 Depreciation for year 5,000 10,250 Less: Depreciation included in closing inventory (1,000) 4,000 (1,250) 10,000------------------------------- Net income for tax purposes before CCA $ 54,000 $ 100,000 Add: Adjustment required by paragraph 12(1)(r) $ 1,000 $ 1,250 Deduct: Adjustment required by paragraph 20(1)(ii) 0 1,000 (1,000) 250------------------------------- Net income for tax purposes before CCA $ 55,000 $ 100,250 ===== ====== Explanation of Changes Introduction The purpose of the Explanation of Changes is to give the reasons for the revisions to an interpretation bulletin. ...

This "half-hectare rule" follows the treatment of land in connection with the definition of "principal residence" under paragraph 54(e) of the Income Tax Act. 9. ...

A commercial activity, as defined by the Excise Tax Act (the Act), includes "(c) the making of a supply (other than an exempt supply) by the person of real property of the person, including anything done by the person in the course of or in connection with the making of the supply. ...

" Act " means the proposed Excise Tax Act as amended by Bill C-62; " Canada " (a) "Canada" includes: (i) the sea bed and subsoil of the submarine areas adjacent to the coasts of Canada in respect of which the government of Canada or of a province may grant a right, licence or a privilege to explore for or exploit any minerals; and (ii) the seas and airspace above the submarine areas referred to in paragraph (i) in respect of any activities carried on in connection with the exploration for or exploitation of minerals; (b) in or in respect of imports, "Canada" has the same meaning as in the Customs Act; " capital property ", in respect of a person, means property that is, or that would be if the person were a taxpayer under the Income Tax Act, capital property of the person within the meaning of that Act, other than property described in Class 12 or 14 of Schedule II to the Income Tax Regulations; " charity " means a registered charity or registered Canadian amateur athletic association, within the meaning of the Income Tax Act; " commercial activity " means: (a) any business carried on by a person; (b) any adventure or concern of a person in the nature of trade; and (c) any activity engaged in by a person that involves the supply of real property or of a right or interest in respect of real property by that person; but does not include: (d) any activity engaged in by a person to the extent that it involves the making of an exempt supply by the person; (e) any activity engaged in by an individual without a reasonable expectation of profit; or (f) the performance of any duty or activity in relation to an office or employment; " consideration " means money, property, a service, or anything else which induces a supplier to make the supply; " exclusive " in respect of the consumption, use or supply of property or a service, means all or substantially all of the consumption, use or supply of the property or service, and "all or substantially all", in respect of the consumption, use or supply of property or a service by a financial institution, means all of the consumption, use or supply of the property or service; "exempt supply" means a supply included in Schedule V to the Excise Tax Act; " fair market value " of property or a service supplied to a person means the fair market value of the property or service without reference to any tax excluded by section 154 of the Excise Tax Act from the consideration for the supply; " input tax credit " means a credit claimed by a registrant for the Goods and Services Tax paid or payable on any property or services consumed, used or supplied in the course of a commercial activity; " money " will have its ordinary meaning but does not include: (a) currency with a fair market value which exceeds its stated value as legal tender in the country it was issued; and (b) currency that is supplied or held for its numismatic value. ...

However, there must be a direct connection between the consumption or use of the property or service and the activities engaged in by the person. ...

NewCo performs activities in connection with the establishment of the commercial activity that it plans to carry on and therefore becomes a registrant. ...

It does not include transporting a person's baggage in connection with a passenger transportation service. ...

The Appendices to this Guideline contain examples of continuous bonds required in connection with (a) licences issued under the Excise Act; (b) specially denatured alcohol permits; (c) excise bonded carriers; (d) manufacturers of malt vinegar and cereal foods. ...

Line 22100 – Carrying charges and interest expenses Claim the following carrying charges and interest you paid to earn income from investments: fees to manage or take care of your investments (other than any fees you paid for services in connection with your pooled registered pension plan, registered retirement income fund, registered retirement savings plan, specified pension plan, and your tax-free savings account) fees for certain investment advice (see Interpretation Bulletin IT-238, Fees Paid to Investment Counsel) or for recording investment income fees to have someone complete your return, but only if you have income from a business or property, if accounting is a usual part of the operations of your business or property, and if you did not use the amounts claimed to reduce the business or property income you reported. ...

On his 2020 income tax return, he must include: $4,000 in subscription fees $1,500 in commissions from beer mug sales $1,000 in Bits from Twitch $400 in donations transferred by his fans to his PayPal account $50,000 from the football tournament $5,000 for the sale of his pictures to sporting companies $1,100 in ad revenues $900 for the football equipment he received for free Ted can claim expenses to generate revenue from his online activities, such as: capital cost allowance (depreciation) on the $4,000 computer equipment, and the non-personal portion of the cost of the fibre-optic Internet connection from his Internet service provider. ...