What happens if I did not file form T2057 when converting my sole proprietorship to a corporation?
Allan Madan, CA
When changing from a sole proprietorship to a corporation, you must file form T2057. Otherwise, capital gains tax will apply on the assets transferred by you (i.e. sole proprietor) to your newly created corporation.
Also, a penalty is levied by the Canada Revenue Agency for filing form T2057 late. The penalty is calculated as $100 per month for each month that the form is past due.
Disclaimer
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.
ABOUT THE AUTHOR
ALLAN MADAN
CA.CPA.CGA
Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.
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