March 2010 BACC BUZZ

With tax season upon us, we would like to thank AC Belliveau Veinotte Inc. for the following information.

BUSINESS/PROPERTY INCOME
GENERAL PURPOSE COMPUTER EQUIPMENT

A 100% Capital Cost Allowance (CCA) deduction rate applies to certain general-purpose computer
equipment, including related system software and ancillary data processing equipment, that:

• is acquired after January 27, 2009 and before February, 2011;

• is situated in Canada; and

• is acquired for the purpose of earning income in Canada.

In addition, the property must be new. An example of ancillary data processing equipment is a printer that is connected to a general-purpose computer such as a desktop or laptop.

Also, in a July 13, 2009 External Technical Interpretation, CRA notes that a restaurant Point of Sale Computer System generally qualifies.

TAX-DEDUCTIBLE INTEREST EXPENSE

A procedure of selling non-registered securities, using the proceeds to pay off a personal debt, and then reborrowing to purchase securities may create tax deductible interest on the new debt.

This conversion of non-tax deductible interest into tax deductible interest has complexities which may require professional assistance.

BONUSES PAYABLE AND PAYROLL REMITTANCES

It is sometimes difficult to remember to make appropriate and timely source deductions for remuneration received from your corporation. However, failure to do so can carry significant costs.

Also, any remuneration not paid within 179 days of the end of the fiscal year in which it was accrued is nondeductible until is paid.

The best answer is to ensure that the source deductions are remitted on a schedule that demonstrates full payment of the bonus within 179 days of the fiscal year end.

OWNER-MANAGER REMUNERATION
DIRECTOR LIABILITY

Under the Income Tax Act, where a corporation has failed to remit source deductions or GST/HST, the directors at that time may be jointly and severally liable to pay that amount plus any interest or penalties to CRA.

However, a director is not liable where the director exercises the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

In addition, no CRA action may be made against the director if more than two years has expired after the director last ceaseed to be a director of that corporation.

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The organizing committee for the

2010 Lunenburg Queens Business

Excellence Awards

are hard at work planning this year's event. A few of the pictures from past gala dinners are below:

Three of the committee members:

Gail Veinotte (right) from Amos Pewter, Heather Fralic, ScotiaBank (centre) and Ann O'Connell Bridgewater and Area Chamber of Commerce (left) enjoying the reception prior to the 2009 awards dinner.

John Bryson (centre) is a committee member and he is shown with other representatives of Safe Home Security

If you have news, information or comments about your business or local events please forward your information to bacc@eastlink.ca before April 1, 2010 to have it included in the next newsletter.