[ykphil]

This is my first post on this forum, and probably not the last...

I'm a newbie with little financial knowledge. Here is my question: I had a holding company with myself as the only director. This company (Company A) was a shareholder of another company (Company B) and received dividends from Company B. I formally closed the company earlier this fall and paid out all monies in the company in the form of dividends to myself. Now I am in the process of preparing the T5 and the report to CRA and and I am unsure about how to do this. Which boxes in the T5 form should I put the amount paid to myself? What about the other boxes? I understand that I also have to submit a final income tax declaration T2.

Any help would be appreciated.

 

[PhilHogan]

This is my first post on this forum, and probably not the last...

I'm a newbie with little financial knowledge. Here is my question: I had a holding company with myself as the only director. This company (Company A) was a shareholder of another company (Company B) and received dividends from Company B. I formally closed the company earlier this fall and paid out all monies in the company in the form of dividends to myself. Now I am in the process of preparing the T5 and the report to CRA and and I am unsure about how to do this. Which boxes in the T5 form should I put the amount paid to myself? What about the other boxes? I understand that I also have to submit a final income tax declaration T2.

Any help would be appreciated.

First let me say that you probably need to visit a qualified accountant to help you file your corporate tax returns (T2) and respective T-slips (T5).

It's likely that all you have to do is prepare a T5 for an ineligible dividend resulting from the windup of the company. However it's also possible that other amounts need to be included e.g. eligible dividends and potentially interest. Without looking at the company's prior tax returns it's difficult to say.

You'll also have to consider other items that may be of relevance regarding the windup of the corp e.g. capital dividend account and RDTOH.

It's probably best that you seek out a professional accountant to help you with your current questions as you don't want to miss anything important or end up paying more tax than you need to.

Good luck

 

[leslie]

I'm basically a do-it-yourselfer but in case I also say "pay an accountant". The fact that you have not filed / prepared the last tax return means to me that you don't know the tax-values of certain accounts within the two companies. Without knowing that, you cannot know what the check represented.

Use the opportunity to get a quick once-over of how you handled the inter-co dividends and withdrawals in the past. You might have a deductible business investment loss. You may be able to take out money as repayment of SH loan or equity capital.