Edit to T4A Box 105 Artists Grant

bcbumpa · ‎February 12, 2024

One of my clients was recently reassessed because, on the T4A he received, there was an amount in Box 105. This was an artist's grant. When I was preparing his taxes, Profile gave me the option of entering this income (net) as taxable income, where it would show up on line 13010 of the T1 or transferring this income to his T2125 as professional income. I chose to transfer it to his T2125. I was wrong, and he was reassessed because nothing showed up on line 13010. Why did Profile give me this option? If an artist's grant must be entered so that it will show up on line 13010, that should be the only option Profile gives me. Hopefully, someone from Profile will see this and comment.

PAULJR · ‎February 23, 2024

I'm not from the Profile team, but there doesn't seem to be a Profile related issue here from what it sounds like.

Based on what you're saying, I would first check the reassessment for 2 things:

1. check the reassessment letter for the Explanation Section and see if they have stated something along the lines of, "Since you did not reply to our letter dated ________, we changed your return." If that's the case, then you client received an Inquiry that needed to be responded to.

2. In relation to point 1, check, and see if CRA removed the income from line 13500. Perhaps they left the income there where you originally reported it and they also added it to line 13000 because no clarification was made if they had sent out a letter.

I'm trying to think of other situations that could have occurred, but if you were able to transfer the income to T2125, then it would have appeared on 13500 and there shouldn't have been a reassessment. Perhaps the original filing did not transfer the income to line 13500 therefore it was not actually reported to begin with?

Again, doesn't seem like a Profile issue, so if you would like to share more information, perhaps it can still be rectified where you client can reverse the impact as it should only be claimed once in either of those lines. Hope that helps.