Federal Forms

Complete Part 1 of Schedule 2 to calculate the total donations available and the charitable donations closing balance. List the charitable donations made to registered charities, registered Canadian amateur athletic associations; Canadian municipalities or if you have unused charitable donations from prior years.

Complete Part 2 of Schedule 2 to calculate the maximum deduction allowable and to determine the amount of claim for charitable donations including gifts of capital property.

The nominal maximum amount of charitable donations that a corporation can deduct is equal to 75% of its net income (line 300). This limitation can be increased by the following amounts:

• 25% of the taxable capital gains arising from gifts of capital property
• 25% of all taxable capital gains in the year from the disposition in a previous year of a non-qualifying security of a corporation that is making a gift to a qualified donee

Charitable donations are deducted in the order they were made (first-in, first-out rule).

If you are reporting nil net income or a loss for the year, you cannot claim donations to create or increase a loss. However, you can carry forward unused charitable donations and claim them in any of the five following tax years.

On line 311 of T2 Schedule 200, enter the amount you want to apply against taxable income. This amount cannot be more than the lesser of:

• the total donations available; or
• the maximum deduction allowable

Complete Part 7 of Schedule 2 to establish the continuity of charitable donations. You do not have to file receipts with your return. However, you have to keep them in case CRA asks for them later.

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Order of Application

Non-capital losses are generally applied against taxable income in the following order:

• Restricted Farm Losses
• Farm Losses
• Non-Capital Losses

However, the program considers the number of years before expiry of a loss when determining the order of application of non-capital losses and farm losses. The program will claim a farm loss that will expire in two years before claiming a non-capital loss that will expire in three years. Restricted farm losses are always claimed to the extent of farm income entered at the "Farm income" cell on the bottom of Schedule 1.

If you want to claim losses differently, override the appropriate "Total" cell for the Applied to reduce taxable Income column or the amount for a specific year in that column of Schedule 4.

Prior Taxation Years

The program calculates the year-end date of all possible prior years based on:

• the tax year entered on the T2.
• the assumption that all prior tax years were 12 months long.

Farm Losses

Farm losses in the current year are automatically calculated from the farm income entered at the "Farm income" cell on the bottom of Schedule 1. To indicate a farm loss on Schedule 1, enter a negative amount (loss) on Schedule 1 so that Schedule 4 updates properly.

Restricted Farm Losses

Prior year restricted farm losses are applied to the extent of positive farm income entered at the "Farm income" cell on the bottom of Schedule 1, where there is sufficient taxable income to offset the loss.

All loss carrybacks are automatically updated from the appropriate federal and provincial loss carryback schedules.

Loss carryback requests must be filed according to the tax year in which the loss arose. You cannot file a loss carryback request for the current year relating to a prior year loss.

A section for listed personal property (LPP) losses is provided at the bottom of Schedule 4.

LPP losses of prior years are automatically applied to the extent of LPP gains for the current year (indicated on Schedule 6) even when there is no taxable income for the year.

These items must be entered on Schedule 4 in the appropriate section (non-capital, capital, farm, restricted farm) and on the appropriate line (transfer upon amalgamation/windup, section 80 adjustment, subsection 111(10), and other adjustments).

The total of the items in each section for non-capital, farm and restricted farm is transferred to the appropriate section of the Schedule 4 at the top of the Adjustments and transfers columns with an appropriate sign (depending on whether it was a deduction or an addition). The program does not know which year the adjustment or transfer applies to, so you have to allocate the amount to the appropriate years in the columns in order for the program to know when the amounts expire. As you allocate the amounts the total at the top of the columns is adjusted and, when all amounts have been allocated to the appropriate year, you should have a zero at the top of the columns.

You will find 7 summary and analysis tables in Schedule 4. The first 3 tables are for non-capital losses that can be carried forward. If a loss has been incurred in a taxation year ending before March 23, 2004, the carryforward is 7 years. If a loss has been incurred in a taxation year ending after March 22, 2004, but before January 1, 2006, the carryforward is 10 years. Finally, if a loss has been incurred in a taxation year ending after December 31, 2005, the carryforward is 20 years.

The last four tables are for farm losses and restricted farm losses that can be carried forward. If a loss has been incurred in a taxation year ending before January 1, 2006, the carryforward is 10 years. If a loss has been incurred in a taxation year ending after December 31, 2005, the carryforward is 20 years.

Ensure the loss is in the correct table based on the eligible carryforward period.

Complete Part 1 of Schedule 5 if there is a permanent establishment in more than one province or territory.

• Complete columns A to F for each province or territory in which you had a permanent establishment in the tax year.
• If there is no taxable income, complete only columns A, B, and D.

CRA assess provincial or territorial income taxes on the amount of taxable income allocated to each jurisdiction. Even when there is no taxable income (e.g., a corporation with a non-capital loss), the gross revenue and salaries and wages determine the allocation percentage. This percentage is used to calculate the provincial capital tax liability.

Note: This also applies to corporations with permanent establishments in Quebec or Alberta.

Complete part 2 of Schedule 5 if:

• there is provincial or territorial tax (and a permanent establishment in more than one province or territory);
• there is a claim for provincial or territorial tax credits or rebates; or
• there is a claim for provincial or territorial refundable tax credits.

Note: Corporations with a permanent establishment in Quebec or Alberta must complete the appropriate provincial corporation returns and schedules to report provincial tax and claim provincial credits and rebates.

For tax years ending in Year 2009 or later, corporations with a permanent establishment in Ontario must also complete Part 2 of Schedule 5 if one of the three previous or six following conditions applies: The Corporation:

• is claiming the Ontario small business deduction;
• is claiming the Ontario credit union reduction;
• has an addition to Ontario basic income tax (such as a transitional tax debit);
• has Ontario corporate minimum tax payable;
• has Ontario special additional tax on life insurance corporations payable; or
• has capital tax payable.

Enter the net amount of provincial and territorial tax payable or the net amount of refundable credits on line 255 of Schedule 5, Tax Calculation Supplementary - Corporations.

If the result is positive, enter the net provincial or territorial tax payable on line 760 of the T2 Corporation Income Tax Return.

If the result is negative, enter the refundable provincial or territorial tax credit on line 812 of the return.

New paragraphs 89(f) and 89(g) of the Income Tax Act provide for the inclusion of the non-taxable portion of capital gains realized by a trust in the capital dividend account.

According to the March 2001 Notice of Ways and Means Motion, this measure has a retroactive effect for elections made with respect to capital dividends payable after 1997.

Include details of all foreign gains or losses on Schedule 6. In order to indicate if the capital gain or loss is from a foreign source, the Foreign Source check box in the corresponding section must be selected. The foreign portion of the capital gains or capital losses will then be updated to Schedule 7.

Taxable dividends

The net amount of deductible dividends is automatically included in property income.

You can choose to manually enter the income or the loss from rental property or provide the information on rental properties in the Statement of Real Estate Rental Properties.

You can also choose to enter the income or the loss from rental property on the line Other property income or on the line Other losses from property, depending on the situation.

When you choose to complete a copy of the Statement of Real Estate Rental Properties, the total net income or net loss in the summary is updated, as a positive amount, to the appropriate line of Schedule 7, as follows:

• The net income is updated to the line 6.2, Real estate rental properties (under regulation 1100(11)) in section 2A of Schedule 7.
• The net loss is updated to the line 14.1, Losses from rental properties (under regulation 1100(11)) in section 2A of Schedule 7.

Foreign Real Estate Rental Property

• The net income is updated to the line S2, Real estate rental properties (under regulation 1100(11)) in section 2 of Schedule 7.
• The net loss is updated to the line Z1, Losses from rental properties (under regulation 1100(11)) in section 2 of Schedule 7.

You have to manually enter any other property income, including, other non-deductible dividends, interest, rent, royalties as well as the income or losses from a specific investment business. Do not enter a negative value to indicate a loss from property.

Enter dividends received from foreign non-affiliated corporations (i.e. dividends subject to Part I tax) on the line "Other Property Income" (much like interest income) in the "Foreign" column for inclusion in line F. These dividends are already included in the "Net Income per Financial Statements" on Schedule 1 and therefore included in the calculation of income subject to Part I tax.

Only Canadian Controlled Private Corporations must file Schedule 7. However, this schedule determines active business income for the calculation of the Manufacturing and Processing Profits Deduction. Therefore, non-CCPC's eligible for the M&P deduction should also complete Schedule 7.

If the corporation is a CCPC and a member of a partnership, complete the bottom section of Schedule 7.

The fiscal period of the partnership will default to 365 days regardless of the fiscal period of the taxpayer corporation. If the fiscal period of the partnership is less than 365 days, enter the number of days by overriding the applicable cell.

Complete the Specified Partnership Income section even if there is a specified partnership loss. In this case, enter the amounts as negatives.

Statement Real Estate Rental Properties (Regulation 1100(11))

Summary of Real Estate Rental Properties (Regulation 1100(11))

Five-Year Comparative Review – Statement of Real Estate Rental Properties (Under Regulation 1100(11))

If corporation is not registered enter "NR".

Enter the code number of the relationship that applies from the following order:

1. Parent
2. Subsidiary
3. Associated
4. Related but not associated

The relationship code represents the relationship that the corporation named above has to the filing corporation. For example, if the corporation named above is the parent corporation of the filing corporation, then indicate "1" as the relationship code.

The following describes the information requested for each column of Schedule 9:

When completing Schedule 9, only report the first level of relationship. If Corporation A, is parent to Corporation B, and Corporation B is parent to Corporation C, the relationship between Corporation A and Corporation C is "associated" (code 3).

Each corporation's Schedule 9 would report the relationships to the others as follows:

Corporation A's Schedule 9

• Corporation B listed as Subsidiary (code 2 under column 400)
• Corporation C listed as Associated (code 3 under column 400)

Corporation B's Schedule 9

• Corporation A listed as Parent (code 1 under column 400)
• Corporation C listed as Subsidiary (code 2 under column 400)

Corporation C's Schedule 9

• Corporation A listed as Associated (code 3 under column 400)
• Corporation B listed as Parent (code 1 under column 400)

Goodwill

Where goodwill is purchased as one of the assets of a business, it qualifies as an eligible capital expenditure.

Customer Lists

Customer List with client’s information bringing an enduring benefit to the business of the purchaser is a capital outlay and is an eligible capital expenditure.

Trademarks

The cost of registering a trademark to protect a trade name, design or product is available as a deduction in computing income. Where the taxpayer buys a trademark from another person who has developed a trademark of enduring value, the amount paid for it is an eligible capital expenditure.

Quotas or Other Government Rights

Milk quotas issued by provincial milk marketing boards are issued originally at no cost to the producer. However, transfers of quotas for a value subject to the terms and approval of the board is eligible capital expenditure.

The cost of other similar rights or licenses issued under governmental authority is also eligible capital expenditure.

Acquisitions

All acquisitions of eligible capital property are pooled together in a tax account known as “cumulative eligible capital”. There is only one CEC account for each business. Only 75% of the cost of the property is added to the CEC account.

Amortization

The Income Tax Act allows a deduction of 7% of the balance in the CEC at the year-end. The amortization is done on declining basis, so any amortization taken in prior years reduces the CEC account. The amount of the allowance is prorated for short year-end. The CEC amortization is, just like capital cost allowance. A taxpayer can claim none, some or the entire allowed amount.

A deduction for an annual allowance can be made if there is a positive balance in CEC account at the end of fiscal period.

The Business Number (BN) is a 15-character number composed of three parts. The first nine characters identify your business. The “RC” identifies the corporation income tax program. The last four characters identify the particular program account.

On line 001, enter your BN for income tax purposes. Enter “0001” as the program account identifier unless CRA has advised you to use a different one. You will find the corporation’s BN on previous notices of assessment, account statements, or remittance forms.

Enter the full name of the corporation. Do not use abbreviations, avoid special characters (e.g. #, &, etc.) and make sure the punctuation is correct.

The corporation type determines whether or not the corporation is entitled to certain

rates and deductions. Following are different types of corporations;

Canadian-controlled private corporation (CCPC)

The corporation is a CCPC if it meets all of the following requirements at the end of the tax year:

• it is a private corporation;
• it is a corporation that was resident in Canada and was either incorporated in Canada or resident in Canada from June 18, 1971, to the end of the tax year;
• it is not controlled directly or indirectly by one or more non-resident persons;
• it is not controlled directly or indirectly by one or more public corporations (other than a prescribed venture capital corporation, as defined in Regulation 6700);
• it is not controlled by a Canadian resident corporation that lists its shares on a designated stock exchange outside of Canada;
• it is not controlled directly or indirectly by any combination of persons described in the three previous conditions;
• if all of its shares that are owned by a non-resident person, by a public corporation (other than a prescribed venture capital corporation), or by a corporation with a class of shares listed on a designated stock exchange,were owned by one person, that person would not own sufficient shares to control the corporation; and no class of its shares of capital stock is listed on a designated stock exchange.

Other private corporation

The corporation is another private corporation if it meets all of the following requirements at the end of the tax year:

• it is resident in Canada;
• it is not a public corporation;
• it is not controlled by one or more public corporations (other than a prescribed venture capital corporation, as defined in Regulation 6700);
• it is not controlled by one or more prescribed federal Crown corporations (as defined in Regulation 7100); and
• it is not controlled by any combination of corporations described in the two previous conditions.

Public corporation

The corporation is a public corporation if it is resident in Canada and meets either of the following requirements at the end of the tax year:

• it has a class of shares listed on a designated Canadian stock exchange; or
• it has elected, or the Minister of National Revenue has designated it, to be a public corporation and the corporation has complied with prescribed conditions under Regulation 4800(1) on the number of its shareholders, the dispersing of the ownership of its shares, the public trading of its shares, and the size of the corporation.

If a public corporation has complied with certain prescribed conditions under Regulation 4800(2), it can elect, or the Minister of National Revenue can designate it, not to be a public corporation.

Corporation controlled by a public corporation

The corporation is a corporation controlled by a public corporation if it is a Canadian subsidiary of a public corporation. This type of corporation does not qualify as a public corporation for determining the type of corporation.

Other corporation

The corporation is an other corporation if it does not fall within the other categories. Examples of other corporations include general insurers and Crown corporations.

If you want the Canada Revenue Agency (CRA) to deal with an individual (such as an accountant, a lawyer, or an employee) or with a firm as your representative for business account related information, they need your consent. You can give this consent by going online at My Business Account or by completing this form.

Note: No information is recorded directly on this form. The information flows from the Identification section and settings within the Preferences.

No, for individual tax and benefit accounts, you have to complete Form T1013, Authorizing or Cancelling a Representative.

Enter your business name and Business Number (BN) as well as your phone number as registered with the CRA.

Authorizing access by telephone, fax, mail, or by appointment

Complete this part if you want CRA to deal with your representative by telephone, fax, mail or appointment. You can enter either the name of the individual or the name of the firm and the firm's BN. If you enter the name of a firm, then all employees of that firm are authorized to deal with CRA on your behalf. If you enter both a name of an individual and a firm (and its BN), then only that individual of the firm is authorized. If you are authorizing a representative (individual or firm) who is not registered with the "Represent a Client" service, the phone number is required.

Authorizing online access

You can authorize your representative to deal with the CRA at My Business Account or by completing this form. You have to enter the Identification number (RepID) if your representative is an individual, enter the BN if the representative is a firm or the GroupID if your representative is a group of individuals. CRA's online service does not have a year-specific option, so your representative will have access to all tax years/periods. When you authorize online access, the access by telephone, fax, mail, or by appointment will also be granted. Your consent will stay in effect until you cancel it.

RepID

The RepID is a seven-character alphanumeric code that identifies your representative. Your representative can register for a RepID online at Representives.

BN

Enter the BN of the tax or payroll services business you want to authorize. To get online access, the tax or payroll service has to be registered as a representative through our "Represent a Client" online service which is available at Representives.

GroupID

A six-character alphanumeric code, starting with the letter G, that identifies a group of representatives. The group of representatives can register online at Representives.

You can authorize access to all your program accounts or to specific program accounts.

Program Accounts

Tick box A to allow access to all of your program accounts. You should also identify the authorization level by ticking the appropriate box. If you do not provide an authorization level, then CRA will assume that you have chosen to "Disclose information only on your program account(s)." See "Authorization level" for more information.

You can expire authorization by entering an expiry date. Tick box B to limit authorization to specific program accounts. If you tick box B you have to complete Part 3b) of this form.

Details of program accounts and fiscal periods

Complete this part if you ticked box B in Part 3a) of this form.

Program Identifiers

Enter the 2 letter program identifier from the following list:

• RP payroll deductions
• RC corporate income tax
• RM import/export (no online access available)
• RD excise duty
• RE excise tax
• RN insurance premium tax
• RG air travellers security charge
• SL softwood lumber products export charge
• RZ information returns (T5, T5007, T5008, RRSP contribution receipts, T5013, T5018, TFSA, SAFER – Shelter Allowance for Elderly Renters

All program accounts or specific program account

You can allow access to all program accounts by ticking the "All program accounts" box for that program or you can limit the access to a specific program account by entering the reference number for the program account you have selected.

Authorization level

Select the level of authorization you want to give to your representative. Tick the box for Level 1 to disclose information only, or tick the box for Level 2 to disclose information and accept changes to your program account(s). If you do not make an entry, then CRA will assume that you have chosen to let the CRA "Disclose information only on your program account(s)."

• Specific fiscal period

If you are not authorizing access to all years, then enter a fiscal-period-end date (not available for online access).

• All years

Tick this box if you want to authorize access for all years.

Note: Online access is available only for all years.

Expiry date

Enter an expiry date if you want the consent to automatically expire. Your consent will stay in effect until you cancel it, or it reaches the expiry date you choose.

Your consent will stay in effect until you cancel it or until it reaches the expiry date you provided. You can immediately cancel an existing consent by calling CRA at 1-800-959-5525 or by using the My Business Account service on the CRA Web site. You can also cancel a consent by completing this form. Tick box A to cancel all previous authorizations. Tick box B to cancel authorization for an individual, group or firm. If you tick box B, provide the name of the individual, group or firm. Tick box C to cancel authorization for specific program accounts and then name those accounts.

You have to complete this part in full, or CRA cannot process your request. Only an authorized person of the business can sign this form. This includes the owner, partner of a partnership, a director of a corporation, an officer of a non-profit organization, or a trustee of an estate.