Hey gang, so here's the situation I'm in. I was a shareholder i n a Canadian corporation. I resigned last year and my shares were paid out end of year in the amount of $40k. Just received my tax bill and it's $50k.
The way this company operates, the employee purchases shares from a retiring shareholder though I own the shares outright. I then make monthly payments to the retired shareholder. If you go to a competitor you must sell your shares back to the corporation. I had purchased $120k worth of shares and had only paid off $40k.
They paid the retired shareholder the balance of the shares in the amount of $80k and they paid me $40k. Problem is they paid it all via a dividend so on my T5 it looks like I received a $120k dividend that is fully taxed like income. So I owe $50k.
I've spoken to other exiting shareholders and this happened to them. Some used ABIL to reduce the amount but this whole situation still seems shady as hell.
Any ideas?
Submitted April 30, 2021 at 08:51AM by BigMlittleOrgan https://ift.tt/2Sfr0R0
