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De Thomas Wealth Management Providing objective and unbiased financial advice that is personalized to each of our client's uniqu De Thomas Wealth Management.

is a different kind of investment firm. Our independence allows us the freedom to offer truly independent advice to our clients. Our confidence in our ability to provide the highest calibre of investment service allows us to think differently about investing. We encourage you to compare our services, fees and performance to other investment firms – and we're confident that you'll quickly discover that De Thomas will exceed your expectations. Founded in 1987, De Thomas remains independent. Being independent and not owned by a bank or mutual fund company, we are able to provide objective and unbiased advice that is personalized to each of our client's unique investment goals and objectives. And by promoting a culture of independence, we are able to ensure our clients that their best interests are always our number one priority.

Tax credits and tax deductions are often treated as interchangeable.They are not.A deduction reduces the income your tax...
10/15/2026

Tax credits and tax deductions are often treated as interchangeable.

They are not.

A deduction reduces the income your tax is calculated on.

A credit reduces your tax after that calculation has been made.

At $80,000 of taxable income, a $1,000 deduction saves about $205 in federal tax because that income falls within the 20.5% federal bracket.

A $1,000 eligible amount for most federal non-refundable credits reduces federal tax by $140 because the 2026 credit rate is 14%.

Provincial tax is separate, and some credits follow different rules.

There is another difference that often gets missed.

Some deductions, including RRSP deductions, can lower the net income used to calculate CCB, the GST/HST credit, OAS recovery tax and other income-tested amounts.

A non-refundable tax credit generally reduces tax owing but does not lower your net income. It can reduce tax to zero, but it cannot create a refund on its own.

Before comparing tax deductions and credits, ask:

1. Does it reduce my income or my tax?
2. Is the credit refundable or non-refundable?
3. Could it affect benefits or clawbacks?

Save this for tax season. Share it with someone who uses “credit” and “deduction” as if they mean the same thing.

Sources: Canada Revenue Agency and Department of Finance Canada, 2026.

PART 6 — THE 45(3) ELECTION: RENTAL TO HOMEMoving back into a property you have been renting out may also have a tax imp...
10/13/2026

PART 6 — THE 45(3) ELECTION: RENTAL TO HOME

Moving back into a property you have been renting out may also have a tax impact.

The change can trigger a deemed sale.

A 45(3) election may defer recognition of the gain when the property becomes your principal residence.

Start by checking two things: previous elections and tax depreciation.

If a valid 45(2) election remains in effect from an earlier conversion, moving back generally does not trigger a deemed sale. A new 45(3) election may not be needed.

For 45(3), depreciation history matters. Capital cost allowance allowed for a tax year ending after 1984 and on or before conversion can prevent the election.

A valid election may also allow up to four earlier rental years to qualify for principal residence designation, subject to Canadian residency and family designation rules.

The filing deadline differs from 45(2): the signed election letter is due by the earlier of 90 days after CRA sends a formal demand, or your return-filing deadline for the year you actually dispose of the property.

Before moving in, review with your tax specialist the previous election letters and rental tax returns. Confirm eligibility, record the conversion date and value, and have the filing deadline documented.

This completes the series. Keep these posts with your property records to help prepare for a conversation with your tax specialist.

ETFs can make it easy to own a lot of investments.But the number of ETFs in your account does not tell you how diversifi...
10/09/2026

ETFs can make it easy to own a lot of investments.

But the number of ETFs in your account does not tell you how diversified you really are.

A broad-market ETF, an S&P 500 ETF and a technology ETF can all hold many of the same companies.

On paper, that can look diversified.

In reality, the same handful of stocks may be showing up again and again across your portfolio.

That overlap can hide concentration risk.

You may own several ETFs, but if the same companies carry meaningful weight in each one, your portfolio can still depend heavily on a small group of stocks.

Since June 1, 59% of S&P 500 stocks are more than 20% below their all-time highs.

The index can look steady while many of the companies inside it are not.

And when the same large companies sit near the top of several ETFs you own, the risk can be duplicated without being obvious.

Different tickers do not always mean different exposure.

Want yours checked?

Comment OVERLAP, then DM me your ETF tickers.

I’ll map out where they repeat, which companies show up across multiple funds, and how much of your portfolio is concentrated in the top holdings.

PART 5 — COMPARING THE OPTIONSWhen you move out and keep your home as a rental, it is understandable to want to defer ta...
10/07/2026

PART 5 — COMPARING THE OPTIONS

When you move out and keep your home as a rental, it is understandable to want to defer tax.

Before making a 45(2) election, it helps to see what each option would mean for you.

For a full home-to-rental conversion, the usual result without an election is a deemed sale at fair market value. The principal residence exemption may cover the existing gain, and that market value generally becomes the new cost for calculating a future capital gain.

With a valid election, that conversion deemed sale is avoided. The property’s cost is not reset to market value.

That difference deserves attention, especially if you are buying another home.

Your family generally cannot designate both properties as principal residences for the same year.

Ask your tax specialist for a comparison using your actual records and reasonable assumptions about your plans. Include the conversion value, purchase and improvement costs, other homes owned, and whether you expect to move back or sell.

The comparison should consider future tax as well as any amount payable now.

If your plans change, revisit the decision with your tax specialist. A temporary rental and a long-term investment property can call for different planning.

In the next post, I’ll cover moving into a rental property and when a 45(3) election may be available.

The government can add up to $7,200 per child to an RESP. Most families don’t miss it on purpose - they miss it because ...
10/06/2026

The government can add up to $7,200 per child to an RESP. Most families don’t miss it on purpose - they miss it because the catch-up rules, and one deadline at age 15, are never explained properly.

Both are in the slides. If your child turns 15 this year, Slide 5 is the one to read before December 31.

Comment RESP and I’ll send you the full breakdown.

PART 4 — THE 45(2) ELECTION: HOME TO RENTALIf you plan to rent out your home, a 45(2) election is worth discussing befor...
10/03/2026

PART 4 — THE 45(2) ELECTION: HOME TO RENTAL

If you plan to rent out your home, a 45(2) election is worth discussing before filing your tax return for that year.

An election is a formal tax choice. A valid 45(2) election prevents the deemed sale at conversion, deferring the gain.

It does not guarantee that a future sale will be tax-free.

While the election is in effect, up to four rental years may qualify for principal residence designation.

Canadian residency conditions apply, and your family generally cannot designate another property for those same years.

The election itself does not automatically expire after four years. Certain qualifying employment relocations can also extend the designation period.

You must continue reporting rental income and eligible expenses.

Do not claim capital cost allowance, or tax depreciation, on the property while relying on the election.

To make the election, a signed letter identifying the property and stating that subsection 45(2) is to apply is filed with the return for the change-of-use year.

Confirm the submission process with your tax specialist if filing electronically.

Ask your tax specialist to compare the outcome with and without the election, then keep a copy of the letter and proof of submission with your property records.

In the next post, I’ll compare making the election with not making it, including how buying another home could affect your decision.

PART 3 — RENTING PART OF YOUR HOMERenting a room or basement can help with household costs. Staying in the rest of the h...
09/29/2026

PART 3 — RENTING PART OF YOUR HOME

Renting a room or basement can help with household costs. Staying in the rest of the home, however, does not automatically settle the tax treatment.

CRA generally does not apply the deemed-sale rule to a partial rental when all three conditions are met:

1. The rental use is relatively small compared with the home’s use as your principal residence.
2. You make no structural changes to make the property more suitable for rental use.
3. You do not claim capital cost allowance (tax depreciation) - on the rented portion.

CRA’s guidance does not provide a universal percentage that makes every arrangement qualify.

If the exception does not apply, the converted portion may be treated as sold at its share of the property’s fair market value. A 45(2) election may be available for qualifying partial changes on or after March 19, 2019.

Rental income still needs to be reported even when the exception applies.

Before renovating or renting the space, give your tax specialist a floor plan, details of shared areas and your proposed changes. Ask about depreciation before claiming it; it is different from ordinary rental expenses.

Keep this with your renovation plans so the tax review happens while you can still adjust the arrangement.

In the next post, I’ll explain how a 45(2) election may defer the change-of-use gain and what to review before making it.

PART 2 — WHEN TAX MAY BE OWINGLast week, I shared how turning a home into a rental can create a tax event - even when th...
09/25/2026

PART 2 — WHEN TAX MAY BE OWING

Last week, I shared how turning a home into a rental can create a tax event - even when the property has not been sold.

A few people have reached out to ask for additional details.

Over the next few posts, I’ll cover renting part of a home, elections that may defer a gain, how to compare your options, and what happens when you move back in.

First, a change of use does not automatically mean you owe tax.

A “deemed sale” means the tax rules treat the property as sold and immediately reacquired at its fair market value. The principal residence exemption may cover some or all of the gain.

The result depends on the property’s history, including qualifying years, other homes owned and Canadian tax residency.

If a deemed sale occurs and you claim the exemption, the sale and designation must be reported, even if no tax is payable. Your tax specialist can confirm the required Schedule 3 and Form T2091(IND).

Before your next tax appointment, put together a short timeline: when you bought the property, lived in it and changed its use. Keep evidence of its value at conversion.

In the next post, I’ll cover how the rules apply when you rent out only part of your home.

Renting out your home may seem like a simple change.You move out, find a tenant and start collecting rent,But tax law ca...
09/13/2026

Renting out your home may seem like a simple change.

You move out, find a tenant and start collecting rent,

But tax law can look at it differently.

When a home changes from personal use to income-producing use, that change itself can create a tax event.

In some cases, you may be treated as though the property was sold even though no actual sale took place.

This is an important aspect that many homeowners do not realize.

Changing how you use the property can potentially trigger tax without a transaction.

In the next posts, I’ll break down:

* how the deemed sale works
* when tax may actually be triggered
* elections that may defer the result
* when those elections may or may not make sense

For now, the takeaway is simple:

If before you decide to convert your home into a rental, treat the change of use as a tax-planning event, not just a rental decision.

Salary or dividends?For incorporated business owners, that question is often treated like a simple tax decision.It is no...
09/12/2026

Salary or dividends?

For incorporated business owners, that question is often treated like a simple tax decision.

It is not.

Leaving more money inside your corporation can be useful. It gives you flexibility, keeps capital available for the business, and can defer personal tax.

But over time, keeping too much investment capital inside the corporation can create trade-offs.

Passive investment income is taxed at a high initial corporate rate. And once passive income exceeds $50,000, your federal small-business limit starts shrinking. For every $1 above that threshold, you lose $5 of federal small-business limit. At $150,000 of passive income, the small business tax savings is completely eliminated.

That is where salary becomes more useful than it first appears.

Salary can help you:

* Reduce corporate taxable income
* Build CPP retirement benefits
* Create RRSP contribution room
* Move long-term retirement money into your personal hands
* Use RRSP deductions to help offset some of the personal tax created by taking salary

Dividends do not create RRSP room or CPP contributions.

That does not make dividends bad, as they are useful component of a financial plan.

Keep enough in the corporation for the business.

Use salary where it helps build personal retirement assets and gradually move excess long-term capital out.

That can also improve estate flexibility. Money held personally may be easier to direct to beneficiaries than wealth that remains tied up inside a private corporation. RRSPs still have tax consequences, but beneficiary and rollover options can simplify planning in some situations.

The goal is not to empty the corporation.

It is to avoid letting the corporation become your entire retirement plan.

The better question is:

How much should stay in the business, and how much should start becoming personal wealth?

Address

9033 Leslie Street, Unit
Thornhill, ON
L4B4K3

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Tuesday 9am - 5pm
Wednesday 9am - 5pm
Thursday 9am - 5pm
Friday 9am - 5pm

Telephone

+19057319800

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