The Audit shows:If any income reported by taxpayer is taxable as "split income", enter the details on Form T1206. What does that mean? When should we complete this form?


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Hello em.bk,

This audit message is warning of the new TOSI (Tax On Split Income) rules.  The TOSI rules were part of the new rules brought in aimed to reduce income sprinkling.  Getting a good source on how TOSI works is not the easiest to find.  The ITA is obviously the most accurate, but also quite confusing.  I have found BDO's summary to be quite informative:

You can also read up with CRA's website/info but from what I have found from them, it lacks detail:

Hope that helps

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