tag:blogger.com,1999:blog-4402283548766807872.post6515012199599544162..comments2024-03-20T02:26:06.500-04:00Comments on The Blunt Bean Counter: Capital Dividends - A Tax-Free Withdrawal from your CompanyThe Blunt Bean Counterhttp://www.blogger.com/profile/11358868550072516313noreply@blogger.comBlogger121125tag:blogger.com,1999:blog-4402283548766807872.post-43354967710324210392022-12-12T23:49:40.798-05:002022-12-12T23:49:40.798-05:00Hi Anon, sorry I live in Ontario and I am not know...Hi Anon, sorry I live in Ontario and I am not knowledgeable in how a corporation is dissolved in Alberta. Ask your accountant or lawyer the steps you should follow or go on the Alberta Corp website, they likely have all the steps detailed, they do in Ontario.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-90112103553050345852022-12-12T00:36:33.981-05:002022-12-12T00:36:33.981-05:00Hi Mark,
Can you guide me how to dissolve an Alber...Hi Mark,<br />Can you guide me how to dissolve an Alberta incorporated co.? I paid out the capital dividend in Sept. and filed the tax return in Nov. However, I am still waiting for the Notice of Assessment. <br />If I did not receive any letter from CRA, when do I expect everything is OK before I dissolve the co. Thanks for your help.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-15701542048243151612022-10-05T08:55:13.997-04:002022-10-05T08:55:13.997-04:00see this link, it has a good discussion on timing....see this link, it has a good discussion on timing. https://www.cadesky.com/tt-13-19/The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-37459638459785644242022-10-04T14:44:35.414-04:002022-10-04T14:44:35.414-04:00Hi Mark,
My corporation has paid out capital divi...Hi Mark, <br />My corporation has paid out capital dividends to the shareholders last year. This year, my corporation has capital loss and I would like to carried back the capital loss to last year. Will this carry back affect the capital dividends already paid out ? Thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-19784597017184037982022-06-16T10:07:16.978-04:002022-06-16T10:07:16.978-04:00Hi Anon, you should speak to your accountant and/o...Hi Anon, you should speak to your accountant and/or lawyer to ensure you have all the correct documents, forms and resolutions prepared.<br /> <br />As per the CRA, you Complete and mail this election, separately from any other return, on or before the earlier of:<br />– the day the dividend becomes payable<br />– the first day on which any part of the dividend was paid<br /><br />So if you were electing on June 30th, typically that would mean you file the T2054 before or on that date and issue the cheque on June 30th <br />The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-73623812803064120762022-06-15T13:11:58.909-04:002022-06-15T13:11:58.909-04:00I have a CDA of $109,000. I want to pay myself thi...I have a CDA of $109,000. I want to pay myself this amount. What is the first step? Do I pay myself first and then send in the T2054 or do I send in the T2054 and then issue myself a cheque? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-12956075306691497552022-05-02T22:48:17.503-04:002022-05-02T22:48:17.503-04:00The lawyer drafts a "certified copy" tha...The lawyer drafts a "certified copy" that is signed by the directors.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-15751275455213984142022-05-01T16:28:06.165-04:002022-05-01T16:28:06.165-04:00Who certifies the directors resolutions? The direc...Who certifies the directors resolutions? The directors themselves or it needs to be a notary/lawyer for the certified copy that need to be filed with the election.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-72066825491478242962022-04-26T18:02:44.977-04:002022-04-26T18:02:44.977-04:00Hi Anon, if you are not certain of the CDA balance...Hi Anon, if you are not certain of the CDA balance you may wish to file the Schd 89 first, however, this could take months to get back and if you have any capital losses in the interim, your CDA balance could be reduced. I would discuss this issue with your accountant and the dating, i don't comment on dating issues.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-18044179291966134132022-04-25T22:21:48.206-04:002022-04-25T22:21:48.206-04:00Great article on capital dividend!
When it says t...Great article on capital dividend! <br />When it says the election has to be filed on the earliest of day payable or day paid, can that be filed earlier than those days and after director resolution. Say if I want to pay on June 30 ,2022, should I file on June 30 or can it be earlier like May 1, 2022. There are director resolution and a certified copy of the resolution. Should these 2 copies be dated the same or different dates. I also want to send schedule 89 to confirm the balance. Should I wait for the confirmation before I proceed the election, or I can do it before receiving confirmation?<br /><br />Thanks very much.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-13622285080380709342021-11-26T00:05:53.442-05:002021-11-26T00:05:53.442-05:00Hi Gary
The cap dividend will be a credit to capi...Hi Gary<br /><br />The cap dividend will be a credit to capital dividend or dividend income for accounting purposes. For tax it will be dealt with on the s(3)The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-5924738232984211682021-11-24T10:36:23.164-05:002021-11-24T10:36:23.164-05:00Hi Mark,
A question about the Capital Dividend re...Hi Mark,<br /><br />A question about the Capital Dividend received by a CCPC. There will be a debit to cash and/or sh loan, but where does the credit go? (i.e. Capital Dividends Received, Dividend Revenue, or directly to retained earnings?) If it is included in accounting income, does it subsequently get removed on the T2? <br /><br />Thank you,Garynoreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-91220091286023494742021-10-22T09:45:00.513-04:002021-10-22T09:45:00.513-04:00In general that is correct regarding payment. But ...In general that is correct regarding payment. But confirm all the facts with your accountantThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-22189025110468308052021-10-19T20:11:11.117-04:002021-10-19T20:11:11.117-04:00Hello Mark, thank you.
Yes - I have been told it ...Hello Mark, thank you.<br /><br />Yes - I have been told it is added to the CDA account at date of sale. My understanding is that the Capital Dividend can then be paid out the next day (we don't have to wait until the first day after year-end).Anonhttps://www.blogger.com/profile/09270896371807229382noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-69008613092936752802021-10-11T17:17:39.369-04:002021-10-11T17:17:39.369-04:00In general, the gain of a building is added to the...In general, the gain of a building is added to the CDA account at the date of the sale - however, speak to your accountant to confirm all the facts to ensure that is the case in your situation.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-59320478537126336732021-10-08T12:50:34.012-04:002021-10-08T12:50:34.012-04:00Hello Mark,
If a building (held whether on accoun...Hello Mark,<br /><br />If a building (held whether on account of investment OR active business) is sold on March 20, 2021 and the year-end is October 31, 2020. Can the CDA not be paid out immediately after the sale of building (i.e. on March 21, 2021). I ask because I am not sure if the "CDA balance is added to the pool at year-end" only refers to ECP or any property is general.Anonymoushttps://www.blogger.com/profile/07193084398781735996noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-79273110810914975322020-05-14T22:57:35.808-04:002020-05-14T22:57:35.808-04:00Form 89 in my software program tracks the CDAForm 89 in my software program tracks the CDAThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-61462062603505054642020-05-05T19:30:37.222-04:002020-05-05T19:30:37.222-04:00Hi Blunt Bean Counter!
I have just run across a c...Hi Blunt Bean Counter!<br /><br />I have just run across a carry fwd of CDA of $2619 from a different accountant, however I cannot find any place to input the carry fwd into the current T2 (to carry to future years)? Can you help? Anonymoushttps://www.blogger.com/profile/09530551560987918645noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-69568654143124135252019-08-24T11:30:29.494-04:002019-08-24T11:30:29.494-04:00Hi Unknown:
Sorry I don't provide specific ta...Hi Unknown:<br /><br />Sorry I don't provide specific tax planning advice on this blog - that being said, if I follow correctly the two shareholders owe the company money and it is not the company that owes them? If that is the case depending upon the all the facts, it may be possible to pay the CDA as promissory notes that offset the loans owing. Speak to a tax person to confirm the facts of the situation provide for such. The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-67382116595173933202019-08-09T04:24:24.866-04:002019-08-09T04:24:24.866-04:00Hello Mark,
I would greatly appreciate your insigh...Hello Mark,<br />I would greatly appreciate your insight on the following: I have to corporate clients which are shareholders of a company. Both corporate shareholders have outstanding loans owing to the company - said loans were disbursed before they were shareholders. The company has a substantial CDA, no cash and has been inactive for a couple years following the sale of its business. Is there any way to to benefit from the CDA under the circumstances? Is it otherwise possible to work compensation between the shareholder loans and the CDA?<br />Thank you in advance for your thoughts on this issue.Anonymoushttps://www.blogger.com/profile/08184345017064669861noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-50054848532709385562018-08-29T13:12:32.389-04:002018-08-29T13:12:32.389-04:00ThanksThanksAnonymoushttps://www.blogger.com/profile/14395014229270622349noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-76567395374049112462018-08-28T23:19:29.645-04:002018-08-28T23:19:29.645-04:00Hi Unknown
The accounting entry is debit capital ...Hi Unknown<br /><br />The accounting entry is debit capital dividends paid and cr cash. When you close the books for the year, the capital dividend gets netted against the retained earnings. The same treatment as for a regular dividend, but you have a new account called capital dividends paidThe Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-86468197980857978472018-08-28T17:11:16.964-04:002018-08-28T17:11:16.964-04:00I have looked everywhere and cannot find an answer...I have looked everywhere and cannot find an answer to this question: What is the actual accounting for the financial statements? A Capital Dividend gets paid out. Cash flows out to a shareholder. What accounts are involved. Retained Earnings? It was suggested to me that my Shareholder Loan would be reduced but that make no sense to me. And there is no shareholder equity per se in my company <br />other than retained earnings. Sorry if you already received this.Anonymoushttps://www.blogger.com/profile/14395014229270622349noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-53095030617892136752018-01-30T00:52:25.982-05:002018-01-30T00:52:25.982-05:00LCGE is only a personal tax concept.
CDA is only ...LCGE is only a personal tax concept. <br />CDA is only a corporate tax concept.<br />So, they work well together in the sense that they don't bother eachother. Connie Chev Chevshttps://www.blogger.com/profile/11551157875569960256noreply@blogger.comtag:blogger.com,1999:blog-4402283548766807872.post-54892577515999903042018-01-30T00:37:44.353-05:002018-01-30T00:37:44.353-05:00The LCGE is tax free exemption, it does not also g...The LCGE is tax free exemption, it does not also get added to the CDA acct or you would be getting double the tax-free amt.The Blunt Bean Counterhttps://www.blogger.com/profile/11358868550072516313noreply@blogger.com