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TaxRobin
TaxRobin, Senior Tax Advisor
Category: Canada Tax
Satisfied Customers: 13313
Experience:  More than 20 years tax expertise
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Corporation had losses many years but taxes were not

Customer Question

Corporation had losses for past many years but taxes were not filed- the last asset just got sold and now dissolution is needed- what's the best way to dissolve, do i have file all years with losses- if so can i just use t2 short return ?
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: no, just unfiled tax returns with losses
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 7 months ago.
Category: Canada Tax
Expert:  Mark Anderson replied 7 months ago.
Yes. You would need to file the necessary tax returns:http://www.gaebler.com/Dissolving-a-Corporation.htm
Customer: replied 7 months ago.
ok, would t2 short form return to report net losses suffice the need to file all returns?
Expert:  Mark Anderson replied 7 months ago.
I did not realize this was a Canada Tax issue:http://www.cra-arc.gc.ca/E/pbg/tf/t2short/README.htmlI will opt out.
Expert:  Mark Anderson replied 7 months ago.
This link will help:http://madanca.com/blog/how-to-prepare-corporation-income-tax-return-for-business-in-canada/
Expert:  TaxRobin replied 7 months ago.
HelloUntil you file and send a copy of the articles of dissolution CRA will consider you still active and will require filing even if no tax to pay.When you want to permanently dissolve your corporation, you should send an application for dissolution to the government body that governs the affairs of your corporation.Two categories of corporations are eligible to use the T2 Short return:You can use this return if the corporation is a Canadian-controlled private corporation (CCPC) throughout the tax year and this year, it has either a nil net income or a loss for income tax purposes.You can also use this return if the corporation is exempt from tax under section 149 (such as a non-profit organization).In addition, the corporation must meet all of the following conditions to use this return:it has a permanent establishment in only one province or territory;it is not claiming any refundable tax credits (other than a refund of instalments it paid);it did not receive or pay out any taxable dividends;it is reporting in Canadian currency;it does not have an Ontario transitional tax debit; andit does not have an amount calculated under section 34.2.As long as you meet the requirements above you can use the short.Attach a note with your final return asking that the account be closed or complete Form RC145, Request to Close Business Number (BN) accounts.

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