Here is the situation, I have a holding company that had no taxable income in the fiscal year. I have already dissolved it (effective at the end of this year). I want to file the final T2 for the year. Here are the details of the current accounting records for the company and based on previous year T2
1) No Income or Expenses in the current year.
2) Balance Sheet:
Total Asset = $0
Due To Shareholder Liability = $8000
Total Liabilities = $8000
Retained Earnings = - 8400 (negative balance)
Capital Stock = $400 (owned by the sole shareholder -Payment of $400 was made to corporation by the shareholder on date of incorporation years ago).
Total Equity = - $8000 (negative balance)
- Will the negative balances trigger a taxable amount owing for the corp or worse for the personal owner?
- What Journal entry should be made prior to year end or how to deal with this for a final return?
- Other things to watch for on final T2 return?
Thanks in advance for your interest/advice on my question.
Final T2 Filing for Corporation (Dec 31). Moving to US Jan 1
Moderator: Mark T Serbinski CA CPA