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Jerry138
Level 1
posted
‎March 09, 2022 09:14 AM
last updated ‎March 09, 2022 9:14 AM

Amount withdrawn from Canadian Controlled Private Corporation

Hi

One of my clients is running a CCPC and took the profit for the year 2021 by way of withdrawal (Say $ 25000/-)(no dividend is  declared) Where should I enter this withdrawal ($25000/-) while preparing his T1 Return? (I entered this withdrawal in "T2125 under the head Part3A - Business Income"

 

Could anyone help me with your opinion in this regard?

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1 Comment 1
janisbossenberry
Level 7
‎March 09, 2022 10:14 AM

Amount withdrawn from Canadian Controlled Private Corporation

He either has to declare a dividend and issue a T5 (T5 would be late) or pay a salary and issue a T4 (remittance of tax and CPP would attract penalties at this point, and T4 would be late).  In the "old" days, we used to sometimes call it a management fee and report it on the T2125, but this is not permitted any longer.

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