There have been many doomsday predictions and 2012 has long been associated with the Mayan prediction of the end of the world. Since the only two certainties in life are death and taxes, we thought we should offer tax tips to anyone who survives the end of the world on December 21.
- Prorating personal amounts: If 2012 does not last 365 days, you will need to prorate your personal amounts to reflect the days that didn’t happen.
- Part-year residency: If the Earth’s plates shift and you find yourself no longer a resident of Canada when the world ends, you will need to file a tax return for the time you were in Canada. If you still have substantial residential ties in Canada, you will need to report your worldwide income.
- Capital losses: The end of the world may cause a stock market crash. You can only claim capital losses against capital gains. But you can carry forward capital losses indefinitely unless the tax rules change in the new world order.
- Cashing in your RRSPs: If you change your retirement plans due to the world ending and you cash out your RRSPs, you will receive a T4RSP slip to report the income on your 2012 tax return. Remember, the tax withheld may not be enough to cover your tax liability.
And if the Mayans were incorrect, you can rest easy on December 22 knowing you can file your tax return for the full 365 days.