Short Year T2

Tax Topics
1

Hi: I am doing a short year T2 resulted from Change in Control. Does taxcycle allow efiling of the short year T2? the review message shows cannot file this return, it doesn’t say can not efile.

Thanks for any help coming.

2

Any tax software will allow a short-year filing… This sounds more like a diagnostic error of some sort.

There’s a box you need to tick on the jacket to indicate acquisition of control. Make sure it’s ticked.

3

Same situation – different question. My client’s been acquired. I’m doing the stub year and T2 as my last engagement. Is the S50 to show the old or current shareholders?

4

" There is an acquisition of control when, during the tax year, a person or group of persons acquired control of the corporation . When control is acquired, subsection 249(4) provides that the tax year of the corporation ends immediately before that control is acquired." Link.

So I would argue that the return is related to the tax year where the old shareholders were still in control and therefore they should be recorded on schedule 50. Not the new shareholders.

5

Old S/H. A change in control occurs at 12:00am on the date the new S/H take over. If shares are bought April 30, your last year end is April 29. No change in S50 until the next T2.

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6

True, unless the company elects ITA 249(4) to apply. This means you can elect to specify time of day. So you elect that the control happens on Apr 30 16.00h for example. [This option is in the Info tab under Filing.]

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7

Yep - when I was at CRA we had the odd series of returns, generally for an amalgamation at 11:58 pm, 11:59 pm, 12:00 am.

8

For stub period prior to acquisition - old S50
After acquisition - new S50

Again, tick the box when doing post acquisition T2. I’m assuming this was a straight share acquisition.

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9

For the Sub period T2 up to Dec 31, what would you do for the equity section. Right now, it’s using the Dec 2023 balance, not the short year return that was filed mid year. I was thinking post couple adjusting entry to match the equity section to the previous T2 filed.

Thanks for any help on thils