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Budget 2019 – Poor wording requires 2 ex-spouses within 5 years for Home Buyers Plan

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This is one of those rare times I hope I am wrong in my interpretation, and look forward to being proven wrong by my professional colleagues.

On March 19, 2019 the federal government tabled its election-year budget. One of the newest and strangest provisions is the ability for people going through a separation or divorce to potentially have access to their RRSP under the Home Buyers Plan.

Now in my article and podcast entitled: “Escape Room – The NEW Small Business Tax Game – Family Edition” with respect to the Tax On Split Income (TOSI) rules, I made a tongue in cheek argument that people will be better off if they split, because then the TOSI rules won’t apply.

In keeping with the divorce theme, beginning in the year of hindsight, 2020, the federal government is giving you an incentive to split up and get your own place.

However, there are a few hoops:

On page 402 of the budget, under new paragraph 146.01(2.1)(a), at the time of your RRSP withdrawal under the Home Buyers Plan, you must make sure that:

  • – the home you are buying is not the current home you are living in and you are disposing of the interest in the current home within two years; or
  • – you are buying out your former spouse in your current home; and

you need to:

  • be living separate and apart from your spouse or common-law partner;
  • have been living separate and apart for a period of at least 90 days (markdown October 3, 2019 on the calendar),
  • began living separate and apart from your spouse or common-law partner, this year, or any time in the previous 4 years (ok, you don’t have to wait for October); and…

…here is where the tabled proposed legislation gets messy.

Proposed subparagraph 146.01(2.1)(a)(ii) refers to where the individual

  • wouldn’t be entitled to the home buyers plan because of living with a previous spouse in the past 4 years that isn’t the current spouse they are separating from

“(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C), and…”

The problem with the wording of this provision, is that it is written in the affirmative by the legislators using the word “and”. This means, you must be able to answer “true” to all the tests for the entire paragraph to apply.

The way I read this, the only way to answer “true” to this subparagraph is if you have a second spouse (ie: spouse other than the spouse referred to) that you shared a home with and you split from in the past four years.

If you have a second spouse that you shared a home with in the past four years, then “paragraph (f)” in the definition of “regular eligible amount” would apply and the answer would be “true”.

If the answer is “true” you can then get access to your RRSP Home Buyers Plan.

If you don’t have a second spouse then, even though “paragraph (f)” might be met, the phrase “spouse other than the spouse referred to” would not be met, and therefore the answer would be “false”.

This would, in turn, cause the entire logic test of the provision to be “false” and so you would not be able to take out a “regular eligible amount” from your RRSP for the Home Buyers plan because you do not meet the provisions.

If my interpretation is correct then I would really be curious as to what part of the economy they are trying to stimulate.

In my opinion the legislation could be fixed with a simple edit:

“(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of:

(A) a spouse or common-law partner; or

(B) a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C); and…”


Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

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Daily Caller

‘No Critical Thinking’: Parents Sound Alarm As Tech Begins To ‘Replace The Teacher’

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From the Daily Caller News Foundation

By Jaryn Crouson

Parents are growing increasingly concerned about the prevalence of technology in classrooms, and the negative side effects that change is fueling among children nationwide.

Ever since the COVID-19 pandemic pushed schools to remote learning, many have only grown increasingly reliant on technology, shifting assignments into digital forms and handing every student a computer or tablet to aid their education in the classroom. But after seeing their kids become angrier, less sociable and less educated, parents are asking where the teachers have gone.

“What are we doing with an iPad all day, for eight hours a day in our kids’ hands?” Patricia McCoy, a mother of four in Wyoming, told the Daily Caller News Foundation. “Honestly, it’s disturbing. They give your kids worksheets on the iPad. There’s no actual critical thinking happening because they’re given apps to replace the teachers.”

Even when parents ask for additional help for their struggling children, the solution at some schools always comes back to more technology.

“If your kid is struggling in math, instead of giving them tutoring, they’re going to recommend to you that your child use this app on their iPad to help teach them how to do this math,” McCoy continued. “But that app doesn’t teach them how to do the math. They enter the problem and it gives them the solution all written out and worked out, so there’s no critical thinking being done. The answer is being given to them. They have ChatGPT at the ready, and other things similar to ChatGPT, which, again, does all the thinking for them. And all they have to do is show up, log into the iPad, get the answers from one app, put it into another app and get the grade.”

This has some parents wondering where the teachers have gone and whether they are teaching their students at all.

“THEY DON’T WANT TO TEACH”

“Covid did create a lot of this, and it made it a lot easier for some of the teachers now to just place these kids in front of a screen,” Mike Maldonado, a California father of five, told the DCNF. “And it makes it easier for some of these teachers because they don’t want to teach. They’re just there for a job.”

“We can’t ignore the fact that all this stuff makes it easier on the teacher, which actually, I think produces a worse result, “Jaime Brennan, member of the Frederick County Board of Education who spoke on behalf of herself and not the board, told the DCNF. “When a teacher can go online and make up an assignment using AI, now they haven’t thought. Now they’re not using their brainpower, and it’s like a trickle down effect. We’ve already introduced screens and technology to the level that as humans, I don’t think we were designed to use, and we haven’t adapted to it very well.”

Critically, Brennan said, the use of AI has prevented students from developing automaticity, the skill of memorizing basic solutions, such as simple addition, to the point that you do not even think about it, which is a foundational skill students carry on throughout their education and adult life.

McCoy told the DCNF that the digital learning environment has left her youngest son academically “two to three years behind” his siblings, who did not go through this new screen-based school system.

“He is drastically farther behind academically,” McCoy said. “He does what he needs to to pass, but intellectually and academically, he is years behind his two brothers and his sister at this age, and that is sad and heartbreaking as a mother to know that I probably failed my child because I went along with what the school said was going to help them.”

Despite being “years behind,” McCoy’s son is on track to graduate on time.

“We graduate kids who have to go to community college and take remedial math,” Brennan mentioned. “Our kids leave 12th grade and they go to 13th grade. So we’re putting out kids that are not ready to operate in the regular world.”

POSSESSED BY THE SCREEN

Not only is she worried about his education, the concerned mom has seen a noticeable shift in her son’s mood as he is forced to rely on more and more screen time.

“I tried to take my son’s phone away one time, and it looked like a demon was looking back at me. My son was not looking at me,” McCoy recalled. “His eyes were completely black and cold. It was like he was a totally other person, like a drug addict, and you’re taking their drug from them. And he was 15 at the time.”

Without his phone, McCoy said her son was a new person.

“That week, he was a totally different person. He wasn’t overly tired and drowsy all day. He was actually interacting with the family and spending time with us. Instead of being shut down and closed off in his room, he was playing with our dogs more,” McCoy said.

Maldonado thinks these behavioral issues stem partly from the lack of human interaction children experience in increasingly screen-dependent classrooms.

“Part of the problem is that they’ve lost a lot of the interaction,” Maldonado said. “This is why some of these kids I think act out, because they don’t want to listen to the teacher. There has to be that communication between two people, two humans, and not a screen where they can’t really interact and get the tone, the voice inflection of a response.”

“That is a major issue,” Maldonado continued. “Without social skills, how do you function in society? And we see it all the time. Social skills are definitely learned, it’s a trait that you pick up from interacting with people when you’re young. And that’s the big thing, people don’t realize that if there’s no interaction, that person is going to be withdrawn, not just from the classroom, but from the home and from society.”

The issue is especially apparent in children who were younger during the Covid year, Maldonado said. The so-called “Covid babies” are typically “the ones who you can see have the majority of the behavioral issues.”

“It is hard to get some of these kids to actually look you in the eye and make eye contact. They don’t know human interaction,” Brennan concurred, adding that students today are not even dating as much as they used to. “I’m really concerned where that’s going to lead, and what our kids are going to be like. We’re already seeing negative impacts of kind of this disintegration, people are waiting till later to getting married. They’re not getting married.”

THE PRICE AMERICA IS PAYING

Meanwhile, as the use of artificial intelligence (AI) among youth increases, more data and stories are coming out revealing the tool often exposes children to inappropriate content, damages the development of critical thinking skills, and at times, drives kids to suicide by explicitly coaching them to do so. Brain scans from the Massachusetts Institute of Technology (MIT) revealed that brain engagement was severely diminished under participants who used AI compared to those who used a traditional search engine, and memory recall following assignments completed with AI tanked.

Interestingly, schools that struggle with budget concerns and often fail to see promised district-wide staff raises somehow find funds to buy brand-new devices for every student — even when they already had slightly older, but still functional devices.

“Most of [the money goes] to administration and fees and other things that have nothing to do with the education of our kids, or they spend it on these expensive iPads and technology that shouldn’t even be in the classrooms, and then they go to the state and say, ‘You’re not giving us enough money. We need more money,’” McCoy told the DCNF. “Well, we keep throwing money at the problem, but the problem doesn’t get better or go away. It gets worse every year. So clearly, money isn’t solving the issue on why our kids can’t read, write and do math.”

“Stop spending the money on the iPads and put that money back in the classrooms instead,” McCoy continued. “Give it to the teachers.”

While Tina Descovich, co-founder and CEO of parental advocacy group Moms for Liberty, mirrors the concerns of many parents, she also told the DCNF there could be a place for technology in the classroom.

“I think they have to be used in a very responsible fashion,” Descovich said. “There’s so many wonderful teachers that would like to use AI in a way to help enhance their skills and teach their children better.”

Moms for Liberty signed a pledge with the White House in September to help foster innovation and interest in AI with America’s youth.

Brennan remains concerned that technology in the classroom prevents kids from thinking independently and may harm future skill building rather than facilitate an interest or expertise in technology.

“Are you trying to keep pace with the kids who are learning to use the technology, or are you trying to create the kids who are going to develop the technology? Because those are two different things,” Brennan said. “So if we’re just teaching our kids to be technology consumers, then sure, the easy way out is to do everything on the technology. If you’re trying to keep teach kids to be the technology developers, they need to learn to think and process away from the technology. They need to have other skills that are not technology based.”

PARENTS STILL HAVE POWER

For parents concerned about the technological takeover of their children’s classrooms who feel like their schools aren’t listening to them, Descovich said that along with helping their kids at home when possible, parents should “rally with like minded parents.”

“Start educating your community,” Descovich said. “I think when parents really understand what’s happening and what the concerns are and what the risks are, they will want to take action. And when you have enough parents showing up at school board meetings and speaking about an issue we have, as we know, you definitely can make an impact, and they will listen.”

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International

Trump vows to pause migration after D.C. shooting

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From The Center Square

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President Donald Trump said Thursday he will pause migration from some countries following the shooting of two National Guard members near the White House.

The suspected gunman, Rahmanullah Lakanwal, 29, is an Afghan national who entered the U.S. in 2021 under a Biden-era immigration program for Afghans fleeing the Taliban movement. He was reportedly granted asylum this year.

U.S. Army Specialist Sarah Beckstrom, 20, died from injuries she sustained in the Wednesday shooting, Trump told service members in a video call Thursday night. Air Force Staff Sgt. Andrew Wolfe, 24, was in critical condition. Lakanwal was also injured in the shooting.

The two victims were members of the West Virginia National Guard sent to Washington, D.C. in August under Trump’s orders for a crackdown on crime.

In a lengthy social media post on Thursday, Trump claimed “reverse migration” is the answer to years of mass migration and said he plans to “permanently pause migration from all third world countries to allow the U.S. system to fully recover.”

Trump also appeared to consider removing migrants who have become U.S. citizens. He said he will “remove anyone who is not a net asset to the United States, or is capable of loving our Country.”

He said the federal government will end all “benefits and subsidies to noncitizens, denaturalize migrants who undermine domestic tranquility, and deport and foreign nation who is a public charge, security risk, or non-compatible with Western Civilization.”

The FBI said they are conducting investigations in Washington State, the suspect’s last known residence, as well as connections he may have had in San Diego.

FBI Director Kash Patel said the bureau has executed “multiple search warrants around the country.”

Patel said Lakanwal had a “relationship in Afghanistan with partner forces.” Multiple reports claim Lakanwal worked alongside the Central Intelligence Agency while in Afghanistan.

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