maybe we need to clear up some definitions:
When you left canada, your shares were DEEMED DISPOSED by reason of departure from canada in 2009 at the FMV on that date. That is a deemed disposition by any definition.
What you did in 2011 has nothing to do with deemed disposition on departure. What you did in 2011 was pay your self a dividend. Presumably this reduced your shares to zero.
But this is not a capital gain/loss disposition, this is a dividend. As a non-resident, you pay a flat tax to canada, and report the income as a dividend.
Presumably (JCGA?) the sahres are now worth ZERO but have not been disposed of. Is this the case.
Property Deemed Disposed of on departure by Canadian to USA
Moderator: Mark T Serbinski CA CPA
It sounds like (and I'm no expert on this matter) you set up a CPCC to eventually creat dividend income rather than cap gains, but your departure from canada got in the way of this, and disrupted the dividend plan by imposing cap gains on you by deeming dipositioning your shares as you left.
You went ahead with the dividend wind-up without realizing that the earlier deemed disposition had basically made that move pointless, or worse, a tax nightmare.
From this and your other thread, it seems like you don't like to get professional advice on doing things, even though there is a LOT of money at stake...
lesson learned... once you get corporation and trusts etc involved, you need to seek pro help.
I hope you do this for your mom before she leaves with the same problem...
You went ahead with the dividend wind-up without realizing that the earlier deemed disposition had basically made that move pointless, or worse, a tax nightmare.
From this and your other thread, it seems like you don't like to get professional advice on doing things, even though there is a LOT of money at stake...
lesson learned... once you get corporation and trusts etc involved, you need to seek pro help.
I hope you do this for your mom before she leaves with the same problem...
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
I do not know how things got so confused. The issue is this:
1. On Aug 2009 I left Canada for a university job in the USA.
2. In Canada I did consulting revenue and invested in marketable securities via a CCPC that allowed low rate of tax on business income (and refundable taxes on taxable dividends paid).
3. On leaving I filed departure tax based on value of the company. I deferred the departure tax by filing an election. At that time, I did not know if I would return to Canada.
4. Presently I have no intention of returning to Canada so I want to wind up my company (now a private company) effective November 30, 2011
5. I have been told that by winding up the company, the 15% withholding tax on the 2011 deemed dividend can be applied against the 2009 departure tax that was deferred ......
6. the only assets in the company are cash and marketable securities worth about 165,000 in 2011 (which will form the deemed dividend on wind-up). The value in 2009 was about $216,000
so ... left in 2009; departure tax deferred in 2009; company to be wound up in 2011 ..... can 15% withholding on wind-up deemed dividend be used to reduce 2009 defered departure tax .....
1. On Aug 2009 I left Canada for a university job in the USA.
2. In Canada I did consulting revenue and invested in marketable securities via a CCPC that allowed low rate of tax on business income (and refundable taxes on taxable dividends paid).
3. On leaving I filed departure tax based on value of the company. I deferred the departure tax by filing an election. At that time, I did not know if I would return to Canada.
4. Presently I have no intention of returning to Canada so I want to wind up my company (now a private company) effective November 30, 2011
5. I have been told that by winding up the company, the 15% withholding tax on the 2011 deemed dividend can be applied against the 2009 departure tax that was deferred ......
6. the only assets in the company are cash and marketable securities worth about 165,000 in 2011 (which will form the deemed dividend on wind-up). The value in 2009 was about $216,000
so ... left in 2009; departure tax deferred in 2009; company to be wound up in 2011 ..... can 15% withholding on wind-up deemed dividend be used to reduce 2009 defered departure tax .....
Well, which is it. You said ealier you were told that the wind-up could NOT be used against your deemed disposition departure tax.
Now you say you were told it could.
From my understanding, it cannot.
Deferral of deemed disposition tax only means that you can pay it once you dispose of the property, not cancel it with other tax that you might owe.
The clause you found in the emigrants guide and in the IT doesn't apply to you, because as both JCGA and I have brought up, you took a dividend, not proceeds from sale.
Now you say you were told it could.
From my understanding, it cannot.
Deferral of deemed disposition tax only means that you can pay it once you dispose of the property, not cancel it with other tax that you might owe.
The clause you found in the emigrants guide and in the IT doesn't apply to you, because as both JCGA and I have brought up, you took a dividend, not proceeds from sale.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
Nelsona: to clarify. "Now you say you were told it could." ... this advice was given to me by cnd. advisor and I accept that you and JCGA are correct when you state " both JCGA and I have brought up, you took a dividend, not proceeds from sale."
So I accept that what you are stating is correct and I have no disagreement with what has been posted. so thx ....
now for the million dollar question .... I have not yet wound up my canadian company. I was advised to do so based on misinformation that has now been corrected ....
what options do I have now ... I don't need the funds in the company, yet I sure don't want to keep paying accounting and filing fees ...
FYI: I won't be using my advisor for my mom:
So I accept that what you are stating is correct and I have no disagreement with what has been posted. so thx ....
now for the million dollar question .... I have not yet wound up my canadian company. I was advised to do so based on misinformation that has now been corrected ....
what options do I have now ... I don't need the funds in the company, yet I sure don't want to keep paying accounting and filing fees ...
FYI: I won't be using my advisor for my mom: