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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28082
Experience:  Taxes, Immigration, Labor Relations
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I would like to get some information about taxes which should

Customer Question

I would like to get some information about taxes which should be paid by solo sareholder/director of proprietary company who decided to close the business (not liquidation due to insolvency) after three years of activity. Let me thank you for your consideration. Kind Regards. Marzena
Submitted: 3 years ago.
Category: Tax
Expert:  Lindie-Moderator replied 3 years ago.
Hi,
I'm a moderator for this topic. I've been working hard to find a Professional to assist you with your Tax, but sometimes finding the right Professional can take a little longer than expected.
I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Lindie
Expert:  Rachel-Mod replied 3 years ago.

Hello,

I apologize as we have not yet been able to find another expert to assist you. Would you like me to continue to search for someone to assist you or would you like for me to close your question at this time?

Thank you for your patience,

Expert:  Lev replied 3 years ago.
Hi Marzena and welcome to Just Answer!
The Company is a separate legal entity and pays income tax on profits.
Transfers from the company to the individual in your case might be classified as either payments to the director (a compensation for services) or as distributions to the shareholder.
The compensation for services is generally treated as wages and is taxed as such.
In case assets (not cash) are distributed to shareholders - these for the company - these assets are treated as sold at their fair market value - so the company might recognize the gain (or loss). The shareholder might also have a gain or loss depending on his/her cost basis (investment into the company).
Let me know if you need any help this matter.

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