If someone receives a cheque in an amount which may put them in a higher tax bracket in Canada must the taxpayer claim that amount in the year receiving the cheque or in the year the cheque is deposited to a banking institution? For example; if you receive a $200.00 cheque in 2006 but you do not bank that cheque til 2007 must you claim that $200.00 in 2006 or in 2007? Which specific tax law clarifies or states that a taxpayer must report the $200.00 in the tax year the money was issued by not officially banked?
I can't tell you the specific law off the top of my head, but you have to declare the income in the year you receive it. You are deemed to have received the income even though you may have chosen to not cash the cheque.
If that cheque came from anybody that issues T3's, T4's or T5's, they will report to CRA that you received the money that year.
Source(s):
I'm a former CRA employee.
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