Question : In my Canadian personal taxes, how do I account for a personal loan I made to an incorporated company?
During 2007, I made a loan (Canadian $) to an incorporated company in Canada. How do I account for this in my personal income tax? Can I deduct this money from my income?
- asked by gpapayia
All Answers:
Answer #1
No you can't deduct the loan unless the companydefaults on it, and then there are certaincriteria you have to follow for that to be thecase (it is called a business investment loss, andthe deduction is often called an ABIL - allowablebusiness investment loss).You report the interestincome from the loan.
- answered by CanadianBlondie
Answer #2
On your company's balance sheet accounting, youshould dr. bank or cash (your loan amount), andcredit shareholder loan (your loan amount).Youcannot deduct your loan for accounting or taxpurposes, unless you compnay goes bankrupt.
- answered by al.jedi
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