4 ms·
In the USA this has tax implications for those who are on the receiving end of a forgiven debt: https://www.irs.gov/newsroom/what-if-my-debt-is-forgiven https:
by nieksand 7y ago
In the USA this has tax implications for those who are on the receiving end of a forgiven debt:
https://www.irs.gov/newsroom/what-if-my-debt-is-forgiven https://www.irs.gov/newsroom/what-if-my-debt-is-forgiven
Is it the same in Canada?
- ksaj 7y agoI don't have a link for you, but in Canada, if the personal debt was connected to a commercial transaction (ie: you bought something using your personal credit intended to benefit an incorporated business) then it is a taxable benefit to that business. The person owes nothing, but the corporation does. In this case, it is of interest to the corporation to give the money back to the individual before tax season, otherwise it is income. The person could always treat it as an investment as well, but there are additional rules to that which of course then affect the individual's taxes. Every penny of it that stays in the corporation is taxable. If the debt was personal only, it is no different than if someone gave you money as a gift. Likewise, we don't tax lottery winnings. But we do tax gifts that come from corporations you own or are employed by, or a board member, etc, as income (taxable benefit). The tax connection, in each case, is because of money going into or out of a corporation you have a financial connection to. That's why you'll never get a lottery ticket as a gift from your boss, paid for by the company. If that ticket won big money, it's a whole world of hurt for the corporation.