My son is a pilot with WestJet. 70% of his salary goes to taxes. He has very little in write offs even though his expenses are very high. Could he set up a charitable trust, have his salary paid into the trust and then borrow back from it saving over 100 thousand in taxes every year?
@bethellaw
Жыл бұрын
Hello Thad, You cannot use a charitable trust to turn ordinary income into a non-taxable salary. A charitable trust isn’t tax exempt, of sorts, unless the lifetime beneficiary is a charity, hence, a Charitable Lead Trust, and all the income is distributed annually. That might work, except all the income would have to go to the charity. So essentially your son would be working for free. He can’t get the income. The money can’t remain in the Trust without taxation, in order for your son to get a loan from the principal. Even if he could, the loan would have to be at minimum the average financial rate for a loan else it would be considered a gift, which opens the door to gift tax considerations. Additionally, Canada's gift tax laws are likely nowhere near as generous as the US. Your son could get a management fee, perhaps, but with the arrangement as described - a pilot reporting no income, working for a charitable trust - it's an automatic audit and not likely a favorable ruling at that.
@OldDocSilver
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@@bethellaw thank you…it seems as though the middle class is doomed under this ( in my opinion) Cartel government.
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