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My aunt is wiring my family some money for living expenses - will we have to pay income taxes?
My aunt on my mother's side is wiring my family some money to be used as our living expenses, but she has been told that any amount over $10,000 will be reported by the bank to either the central bank or the Canada Revenue Agency for tax purposes. I have no idea what she is talking about.
I'm assuming that any amount she wires to us is NOT taxable since it's a gift of cash. It's only if we use the gift for investments or to otherwise generate profit that we'd have to declare and pay income tax for. Is this right?
My aunt lives overseas.
2 Answers
- GeorgeLv 61 decade agoFavorite Answer
You're right.
The transfer will be reported, and you may be asked to prove that the money comes from a non-taxable source. If it is a genuine gift, there is no tax. You and your aunt should hold onto the documentation related to the funds being transferred in case you get asked about it by CRA.
- Fred SLv 71 decade ago
No. Gifts received by Canadians are not taxable income. You're correct, if you invest the money, then you have to pay tax on its income. But if you spend it, no tax.
The $10,000 figure is regarding the anti-money laundering regulations. So, yes, it may be reported (to Dept of Finance, not CRA), but that doesn't make it taxable, nor is it a concern as long as the money isn't from some illegal activity.
