Balance Sheet Hot Items

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👉Tangible Assets

1. Real Estate - Property tax, transfer pricing, capital gains recharacterization risks

2. Luxury Equipment (aircraft, yachts, art) - Business vs. personal use challenges

3. Inventory & WIP - Valuation disputes (LIFO/FIFO, write-downs, cross-border)

👉Intangible Assets

1. Goodwill - Impairment and valuation disputes

2. Intellectual Property - Transfer pricing, royalty rate scrutiny

3. Customer Lists/Non-Competes - Sometimes reclassified as goodwill

👉Financial Assets

1. Cross-Border Accounts - Strict reporting (T1135, FBAR, 8938)

2. Related Party Loans - Thin capitalization, transfer pricing rules

3. Crypto/Digital Assets - Volatile valuation, poor records

4. Deferred Assets

👉Red-Flag Assets

1. Shareholder Loans - CRA reclassifies as taxable benefits if unpaid

2. Offshore Trusts - Harsh penalties for non-disclosure

3. Insurance Policies - Deductibility and valuation challenges

4. Related-Party Real Estate - Can be recast as disguised dividends

👉Emerging Hot Assets

1. Carbon Credits - Evolving valuation rules

2. Private Equity Interests - Valuation and exit disputes

3. Digital Media Rights - Cross-border licensing scrutiny

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