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Do you report all your Capital Gains?

theycallmebruce

Active member
Nov 17, 2002
1,107
1
38
What happens if you don't report all your capital gains to the tax man? Has anyone been audited and then have to pay taxes on unreported gains?
 

AJstar

New member
Oct 20, 2002
1,521
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What happens if you don't report all your capital gains to the tax man? Has anyone been audited and then have to pay taxes on unreported gains?
Plus penalties,plus interest,plus you're now on cra's radar for like, everything.
But ,hey go for it and let us know how it turns out for ya. May have to wait a few years before they catch up to you though.
 

theycallmebruce

Active member
Nov 17, 2002
1,107
1
38
Plus penalties,plus interest,plus you're now on cra's radar for like, everything.
But ,hey go for it and let us know how it turns out for ya. May have to wait a few years before they catch up to you though.
I am not implying that I don't report all my capital gains. I am just curious as to what happens if you don't.
 

danmand

Well-known member
Nov 28, 2003
46,353
4,776
113
CRA gets what is essentially a copy of your yearly statement from your broker.
 
B

burt-oh-my!

You are just running a huge risk in having a growing liability. Personally, I never ever push my taxes to the limit in terms of expenses etc, in fact, I am sure if I got audited I would probably get a refund. I just have a great fear of havng some liability compounding for years without me knowing it.
 

splooge

New member
May 5, 2010
928
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San Jose, CA
I know someone who got away with it... For seven years. It's not worth it- the interest, fines and legal fees not only take up all of the unreported gains, it left him with less than his original principal investments.

This friend of mine felt very good about his scam right up until he got caught... Needless to say, he's a changed man right now- very pessimistic and miserable.

Also, those familiar with the rule of 72 and compounding interest can figure out why the CRA deliberately wait 6 or 7 years to go after evaders... Especially when considering any capital gains paperwork gets filed to the CRA anyways.
 

GPIDEAL

Prolific User
Jun 27, 2010
23,355
9
38
It's called income tax evasion and potentially, you can go to jail Bruce.
 

FatOne

Banned
Nov 20, 2006
3,474
1
0
What if you don't have enough income to be taxable. I have some REITS and the figuring out the tax implications on them is an utter pain in the ass. Worse if you combine it with a DRIP.

In theory you are not reporting income, but can they nail you if you still don't owe any taxes either way. I don't know, but someone here should.
 

noalias

New member
Dec 12, 2010
81
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0
op is an idiot. what kind of question is this? why dont u try to practice ur little theory and see how it turns out?

sure, you will escape cra for 5, 10, maybe even 15 years but they will catch up to you and when they do all that interest u'll have to pay is gonna look real nice. it's the gov't, they have groups of ppl behind desks looking for ppl like u.
 

fmahovalich

Active member
Aug 21, 2009
7,255
13
38
Ok ..here is the question. I have a second income house.......rented....it runs a small positive cash flow....

If I sell it eventuallly (No not my primary residence)...how do they know what went on in the finances.

Are you saying a real estate broker would report the sale to...who?

And do I report it?

(Im thinking I will move back in - primary residence and THEN I SELL........- VOILA!!!

But if I just sold it (How would I report...or get caught..... NOT REPORTING Cap. Gains! ?
 

Primetime21

Well-known member
Nov 27, 2001
437
478
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internet
To fmahovalich, CRA can access the sale of any property if they really want to. The land titles are kept with each city, town, etc. and CRA can randomly if they want check the sale of any property. Would you get caught if you don't declare the sale, not necessarily, but is it really worth it if you do get caught. Your name will be listed on 2 different properties till you sell one of them so CRA could definitely catch you.
Are you declaring the second house as a rental on your tax return at present?
 

FatOne

Banned
Nov 20, 2006
3,474
1
0
It is not a theory. If you don't report income it is tax evasion and that incurs penalties, possible jail, as well as back interest. This is a crime. They nail you because in a subsequent year after your CRA assessment has been given, you will always owe taxes on unreported income.
What if your total reported and unreported taxable income is below $9104, so there is no taxes due.
How can you evade something if you don't actually owe anything.

I'd assume they only thing they could nail you on is falsifying your tax return, if there is such a charge, and the other question is would they even bother, if there is nothing owing.

Not that I would consider doing this on the basis of something I read on Terb. Just putting it out there.
 
B

burt-oh-my!

Ok ..here is the question. I have a second income house.......rented....it runs a small positive cash flow....

If I sell it eventuallly (No not my primary residence)...how do they know what went on in the finances.

Are you saying a real estate broker would report the sale to...who?

And do I report it?

(Im thinking I will move back in - primary residence and THEN I SELL........- VOILA!!!

But if I just sold it (How would I report...or get caught..... NOT REPORTING Cap. Gains! ?
What about bank account transactions? Presumably you are being paid rent by cheques, when you sell I dont think you will receive cash... There's a nice juicy trail.
 

TeasePlease

Cockasian Brother
Aug 3, 2010
7,740
4
38
Ok ..here is the question. I have a second income house.......rented....it runs a small positive cash flow....

If I sell it eventuallly (No not my primary residence)...how do they know what went on in the finances.

Are you saying a real estate broker would report the sale to...who?

And do I report it?

(Im thinking I will move back in - primary residence and THEN I SELL........- VOILA!!!

But if I just sold it (How would I report...or get caught..... NOT REPORTING Cap. Gains! ?
Primetime is right. Real estate transactions are public record, and I assume you paid property taxes, mortgage, utilities, etc. All of these leave a paper trail.

Did you put down a deposit on your purchase? Did you ask for interest on your deposit? If so, you would have had to provide your SIN, and you have been T5-ed on it (thus reported to CRA).

Best case scenario is that they will assess you on the capital gain. Worst case is that they will assess you on undeclared rental income (if they can prove you rented it out). Either way, you're screwed on penalties and interest.

Moving back in before you sell it will kinda work. It will give you one year of CG shelter.
 

Mencken

Well-known member
Oct 24, 2005
1,047
40
48
What if your total reported and unreported taxable income is below $9104, so there is no taxes due.
How can you evade something if you don't actually owe anything.

I'd assume they only thing they could nail you on is falsifying your tax return, if there is such a charge, and the other question is would they even bother, if there is nothing owing.

Not that I would consider doing this on the basis of something I read on Terb. Just putting it out there.
What your taxable income is and the crime you are talking about have nothing to do with each other. You could be charged with crime and still not owe any tax.

Why would you even consider it. Just take a stab at reporting it the best you can. They'll correct it if you do it wrong. Maybe. But better than taking a chance on a criminal conviction.
 
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