Happy Thanksgiving weekend to all of you! I trust you have many things to be thankful for as you take time to celebrate and share a meal with family and friends. While taking a break this long weekend, it's also a great time to reflect and plan for the remainder of the year. In this issue, I share some recent tax developments and court cases that could impact your real estate, employment, and personal financial planning. Enjoy this issue and please remember to share this with everyone in your network:

1. Real Estate: Change in Use?

If you own income-producing properties and are considering converting them for development, knowing exactly when the property changes from capital to inventory is critical. A recent Tax Court case involved taxpayers converting commercial rental properties to residential condos. The CRA argued the properties became inventory earlier, attempting to tax the $13.25 million gain fully as business income. However, the court ruled that preparatory steps like rezoning do not automatically change the character of the property. The conversion only occurred when financing was secured and the taxpayer became irrevocably committed to the project. There are significant tax implications when changing the purpose of real property, so always seek consultation to understand your options.

2. Employment Expenses for Commission Salespersons

If you earn commission income, you might assume you can deduct third-party costs incurred to grow your sales. A commissioned salesperson learned this the hard way when the court denied an $86,231 deduction for business plan fees paid to a corporation. The court ruled that for an employment expense to be deductible, the employment contract must explicitly require the employee to incur the cost without reimbursement. Additionally, the expense must actually be paid in the year of deduction and must be reasonable in amount. Ensure your employment contract aligns with your required out-of-pocket expenses.

3. Modern Shared Office Space – Promo Rates to Dec 31

If you need a professional space to work or meet clients in Mississauga, we have a spot for you! We’ve just opened our shared office space at 5484 Tomken Road, Unit 34, Mississauga and are offering introductory promo rates until December 31, 2026.

• 5 private offices (furnished, monitors included)
• Boardroom for client and team meetings
• 6 open desks for flexible or hybrid work

Rates start from $20/day for desks and $40/day for private offices, with flexible daily, weekly, and monthly options.

If you’re an accountant, consultant, freelancer, small business owner, or remote worker looking for a quiet, professional space near Tomken & Matheson, I’d love to show you around.

To book a space or schedule a tour of the office space, text or call Ken at 416-706-3491

4. Voluntary Disclosures Program (VDP): Your Second Chance

The CRA is increasingly using AI tools to identify outliers and catch unreported income. If you need to correct past tax filings, the Voluntary Disclosures Program (VDP) offers a way to set things right without triggering future surveillance. The CRA recently confirmed that coming forward through the VDP does not flag you for future audits. Approved applications can result in up to 100% penalty savings and significant interest relief. If you need to get caught up, taking advantage of the VDP sooner rather than later is a smart financial move.

5. Have You Seen the Podcast Episode?

Recently, I was a guest at Tobi Adekeye’s Wealth on Your Terms podcast where we discussed different ideas on how to minimize taxes and accelerate your wealth. If you’ve not seen it yet, you can watch it here and while you’re there, remember to subscribe to my YouTube Channel to get more valuable content that will help you live a tax-efficient life.

Looking to Optimize Your Taxes and Build Wealth in 2026?

Whether you’re dealing with real estate, corporate structuring, or looking for ways to lower your personal tax bill, having a proactive tax plan is critical. If you'd like to review your current tax strategy or explore ways we can help you keep more of what you earn, feel free to book a no-cost consultation call with me here.