I have a new client - his holdco owns 50% of opco (his brother’s holdco owns the other 50%)…opco paid a safe income dividend of $250K to each of the holdcos. Opco retained earning are well over the $500K in dividends and there is no other pending transactions as to selling the business or anything else…they are making an inter corporate dividend to transfer cash to the holdcos to purchase a building.
I am getting confused as to how to report this in taxcycle T2 Schedule 3 for the Opco: the payment of a dividend to a connected company.
And while we are at it, how would you report it in taxcycle for the holdco?
Thank you