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Disability Tax Credits (DTC)


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maureen burlesonMaureen Burleson helps us explore the complicated issues and reporting requirements of Disability Tax Credits.  Families need to know that credits may be available for loved ones with specific health issues. Through her many years of helping and guiding her clients, Maureen has learned what the government will approve and what they expect in terms of paperwork.  Her insights into this topic will be of great value to many Canadians.  During our conversation we talk about:

  1. What exactly is the disability tax credit and how do I know if I’m eligible to receive it?
  2. If I’m approved for the DTC what do I do next?
  3. What if I don’t need the DTC, can I transfer it to my spouse or someone else?
  4. What can I do if I’m not approved for the DTC?
  5. Is there any cost in applying for the DTC?
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About Maureen Burleson, CPB,Certified QuickBooks Online ProAdvisor

Hi, I’m Maureen Burleson, President of The Montana Group.  I’ve been doing bookkeeping for clients and preparing tax returns for over 30 years.

My first full time job was at the Canadian Imperial Bank of Commerce, at the corner of Yonge and St. Clair in Toronto.  That’s really when I discovered the love of working with numbers.  I became an entrepreneur in 1977, with a small accounting firm located in Toronto. Since that time, I have worked with hundreds of clients, in a variety of industries. Whether retail, wholesale, manufacturing or non-profit organizations, I have a wealth of knowledge and experience in bookkeeping and related services.

As an entrepreneur I recognize that my success is based on that of my current and potential clients and I try to foresee problems and solutions for others.  We have differentiated ourselves in the business community, have adopted some green methods of bookkeeping and are helping proprietors develop contingency plans. These include creating strategic procedures to terminate their businesses whether they are still available to do it themselves with our assistance or we act on their behalf.

Charitable giving is something near and dear to my heart. Doane House Hospice is a charitable organization that I have been involved in as volunteer for over 18 years now.

On April 24th 2013, I was honoured to be recognized as a Business Person of Character by The Character Community Foundation of York Region.

On a more personal level I have an avid love of reading and frequently come across items that move me, something that touches my heart or makes me think twice.  The following quote from psychologist Ilon Tobin does both.  He defines true success (and I agree) as “giving and receiving love, having physical and mental health, enough wealth to provide you with options, and the time to enjoy them all”…

The Montana Group

Whether you’re preparing your personal tax return for 2014, or having a tax professional do it for you, there’s a possibility you might be lying to Canada Revenue Agency (CRA). It’s so easy to skip, or say ‘No’ to the question on the information page – Did taxpayer own foreign property at any time in 2014 with a total cost of more than CAN $100,000? Foreign property is not limited to real property such a condo in Florida that you use for personal and rental purposes.

Specified Foreign Property (SFP) includes:

  • Shares in foreign companies, even if held in a Canadian brokerage
  • Amounts in foreign bank accounts
  • Interest or units in offshore mutual funds

Property Not Included in SFP includes:

  • Property held in registered accounts such as RRSPs or TFSAs
  • Property used mainly for personal use i.e. vacation property, artwork, jewellery, boat

If at any time in 2014 you owned SFP with a total cost exceeding $100,000 you must report it on the form T1135. If you have property close to the $100,000 amount in U.S. funds, you must convert that value into Canadian Funds which could cause you to exceed the $100,000.

Total cost refers to the adjusted cost base and not the fair market value. If you purchased a Florida condo in the year 2001 for $150,000 when prices were higher, but the property is now valued under $100,000 you must report it, if it’s not used for personal use solely.

This is an onerous task as you must also break down the specified foreign property by the country where the SPF is located. If you have shares of foreign corporations held with your Canadian brokerage accounts in the United States, Brazil, Hong Kong, etc., some of the details required in reporting are:

  • Maximum cost of the SFP during the year,
  • Cost of the SFP at year end,
  • Amount of income (or loss) related to the SFP,
  • Amount of any new capital gains (or losses) realized on the disposition of the SFP.

Penalties for Failing to File a T1135

The penalty for failing to file a T1135 return is $25 per day for up to 100 days (minimum $100 and maximum $2,500) for each year.  When failing to file is done knowingly or under circumstances amounting to gross negligence, the penalty is $500 per month for up to 24 months (maximum $12,000), less any penalties levied. There are additional longer term penalties that you can look up if applicable.

Voluntary Disclosure Program (VDP)

If you determine you should have said ‘Yes’ to the SFP question on the information page of your tax return you may still have time to correct the problem. Under the VDP you can voluntarily correct inaccurate, incomplete, or unreported information, and do so without penalties or prosecution, if a valid disclosure is made to Canada Revenue Agency (CRA). To be a valid disclosure it must include all 4 of the following conditions:

  • Must be voluntary
  • Must be complete
  • Must involve the application or potential application of a penalty, and
  • Must include information that is more than one year overdue.

It will not be considered a voluntary disclosure if you know the CRA has already contacted you with a request for information that would uncover the information to be disclosed. If CRA accepts the disclosure as valid, taxes and interest will still be payable. The relief will be in the penalties that you do not have to pay.

I would be interested in hearing from you if you have questions, need assistance or have attempted to gather the information required to complete the form, and what challenges you had in that process, and completion of the T1135.

Until next time,


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