Question: The Canada Customs and Revenue Agency has asked me to send them $3,200 per quarter for income taxes. By my calculations, I won't owe that much this year. What would be the consequences of me not sending any instalments, but sending the whole amount before the Dec. 15 requirement?

Answer: "The strategy for determining instalment payment requirements is part art and part science," says a certified management accountant and a certified financial planner in Vancouver. The downside risk of not paying enough may result in instalment interest being charged for "late and/or insufficient instalments."

The upside risk from paying too much is the government has the use of your money interest-free for a large part of a year.

If you send what CCRA asks for, but all in December, then "late" instalment interest will be charged.

Question: What is the industry standard or, alternatively, a reasonable standard for the length of time it should take a financial services company to transfer locked-in RRSPs from an individual to a former spouse as per the terms of a separation agreement?

Answer: There is no industry standard for the length of time it should take to transfer a locked-in RRSP in this particular scenario, says a vice-president of taxation and estate planning in Toronto. There are a number of items that need to be provided to the transferor fund company before it allows such a transfer, which might cause a delay.

For example, we would require a Canada Customs and Revenue Agency Form T2220 signed by both spouses. We would also require a copy of the original separation agreement, divorce decree, or court order in which there is a clause indicating how the RRSP is to be split. Finally, before transferring the funds to another institution's locked-in account, we would also require the receiving institution to sign our locking-in agreement.

If all the documents are received in good order and no additional information is required, the transfer would be executed immediately. From our experience, if the funds are going to another institution and are to remain locked-in, there may be some delay before the receiving institution signs and sends back the locking-in agreement.

Editor's note: For a straightforward transfer of an RRSP account by the same person from one dealer to another, the Investment Dealers Association stipulates a timeframe of 10 days. However, the 10 days are calculated from the date by which the firm delivering the account completes the necessary data input into an electronic transfer network. Delays can be caused by, among other things, the transfer of assets from one owner to another.

Question: I have a question concerning capital gains tax on a primary residence. My mother developed Alzheimer's disease and is now in a care unit. I hold power of attorney on her behalf and am contemplating selling her house. As she is no longer living there would the sale attract capital gains?

Answer: The rules concerning the sale of a principal residence are complex, says Adrian Mastracci of Vancouver-based KCM Wealth Management, and are outlined in an interpretation bulletin issued by the CCRA.

Generally, a property qualifies as a principal residence if it is a housing unit the taxpayer owns and lives in. If the house is not occupied, it can qualify as a principal residence for up to four years under a special election.

Unlike our cousins to the South, selling a principal residence in Canada does not attract tax on the capital gains. Assuming that your mother vacated her home in the recent past, the sale proceeds should not attract taxation.

Question: If I am taking an on-line course from the University of New Brunswick, which requires a computer and high-speed Internet, can I claim my computer and my Internet payments?

Answer: The computer and Internet would not be eligible under CCRA's tuition and education rules since only actual course fees qualify, says a regional vice-president in Toronto.

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.