I have a question and wondering if someone can help.
In 2006 i was working in Canada through my own corporate and had two employees paid taxes in Canada. In 2008 moved to US and never used that corporation closed corp in 2009 and filed i believe RC145? i am just wondering if i was suppose to inform US about that corporation?
Keep in mind i never got paid or did any work in the corp after i moved to US
Thanks
Question on Canadian Corp
Moderator: Mark T Serbinski CA CPA
RC145 is simply a request to close down your business number, if you close down a corp you need to get a certificate of dissolution from the governing body that you were incorporated under and then file a final T2.
Filing a RC145 is not enough, you must file T2 with a resulting liquidating dividend paid to the shareholders on any remaining property then you report this also to the IRS. The time you left Canada you were deemed to have sold the shares in your CCPC for fair market value and the resulting gain on this was a deemed dividend so this amount you were suppose to have included in income in Canada when you left is now deducted from the liqidating dividend on dissolution and the sale of the sale of the shares now will trigger a capital loss had you done it correctly when you left Canada.
WHat you need to do now is dissolve the company, file a final T2 and any liquidating dividend if any properety is in Retained Earnings will be a dividend to you and report this to Canada and also to US now since you reside in US and claim a foreign credit in the US on the tax paid to Canada on this dividend.
Filing a RC145 is not enough, you must file T2 with a resulting liquidating dividend paid to the shareholders on any remaining property then you report this also to the IRS. The time you left Canada you were deemed to have sold the shares in your CCPC for fair market value and the resulting gain on this was a deemed dividend so this amount you were suppose to have included in income in Canada when you left is now deducted from the liqidating dividend on dissolution and the sale of the sale of the shares now will trigger a capital loss had you done it correctly when you left Canada.
WHat you need to do now is dissolve the company, file a final T2 and any liquidating dividend if any properety is in Retained Earnings will be a dividend to you and report this to Canada and also to US now since you reside in US and claim a foreign credit in the US on the tax paid to Canada on this dividend.
JG