I have a client who is in the process of divorcing his wife. He is employed full time as a chef at a Retreat and Community Centre. He is also the sole owner of an Incorporated company.
A bit of back story…since the separation, he has been having a hard time financially and has been using funds from the corporation. I have explained that he can’t be taking money whenever he needs to purchase groceries, dinners, etc.
What is the proper way for these funds to be dealt with on the financial statement for the courts? Does he need to declare this as current income as it started in January 2020? Also, will it be best to issue a T3 for Dividends for this money for tax purposes or does he need to repay the funds to the corporation?