A client wants to close his corporation with CDA balance of more than 50K. I was going to issue a capital dividend but realized he recently closed his bank account. Can I issue a capital dividend and credit to due to shareholder like a normal dividend?
Notwithstanding anything else, what good would that do, even if it worked? A “normal” dividend is NOT a journal entry against a shareholder loan (usually debit) balance, although CRA may tolerate that. At law a “normal dividend” (which includes a capital dividend) is an ACTUAL payment, which means that you client closed the bank account too soon and needs a new, or reopened one.
I guess the dividend could be paid in cash (assuming that the corp has a hoard of cash stored somewhere….which may occasion other questions….).
Oh…and you still need to make and paper the election. There’s problems all around that one IMO.
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