Tiffany MacGraw, a Canadian citizen, left Canada in 2005 to settle in a country with which Canada has no tax treaty. In 2011, her 26-year-old daughter Cassidy came to Canada to attend university. On January 27, 2013, after completing her studies, Cassidy decided to remain in Canada on a permanent basis. To help her daughter settle in Canada, Tiffany made numerous visits to Canada in 2013 to see Cassidy. Tiffany visited her daughter from January 15 to March 15, and from May 10 to August 31.
Required
Determine if Tiffany and Cassidy are liable for Part I tax on their worldwide income for 2013, and justify your answer. Explain clearly the 2013 tax consequences for each.
Solution
Cassidy is a canadian citizen as she was born in canada & she was also residing in canada for the whole year 2013 and also decided to remain in canada on permanent basis on Jan,27 2013. Her income will be taxed as per the canadian laws.
For Tiffany MacGrew he resided in canada for 2 month (Jan15 to March 15) and may 10 to Aug 31 i.e. for 112 days . that means a total of 171 days. As his purpose was not to reside permanently in canada & he resided there for less than 180 days he will not be taxed in canada on total income. If any income has been earned in canada during his stay then his income in canada will be taxed in canada.
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Tiffany MacGraw- a Canadian citizen- left Canada in 2005 to settle in.docx
1. Tiffany MacGraw, a Canadian citizen, left Canada in 2005 to settle in a country with which
Canada has no tax treaty. In 2011, her 26-year-old daughter Cassidy came to Canada to attend
university. On January 27, 2013, after completing her studies, Cassidy decided to remain in
Canada on a permanent basis. To help her daughter settle in Canada, Tiffany made numerous
visits to Canada in 2013 to see Cassidy. Tiffany visited her daughter from January 15 to March
15, and from May 10 to August 31.
Required
Determine if Tiffany and Cassidy are liable for Part I tax on their worldwide income for 2013,
and justify your answer. Explain clearly the 2013 tax consequences for each.
Solution
Cassidy is a canadian citizen as she was born in canada & she was also residing in canada for the
whole year 2013 and also decided to remain in canada on permanent basis on Jan,27 2013. Her
income will be taxed as per the canadian laws.
For Tiffany MacGrew he resided in canada for 2 month (Jan15 to March 15) and may 10 to Aug
31 i.e. for 112 days . that means a total of 171 days. As his purpose was not to reside
permanently in canada & he resided there for less than 180 days he will not be taxed in canada
on total income. If any income has been earned in canada during his stay then his income in
canada will be taxed in canada.
