[Rola]

Is there a time limit on when to pay Directors fees and bonuses payable or can they stay payable for say 2 years.

[David Blue]

Rola, on Mar 1 2008, 05:14 AM, said:

Is there a time limit on when to pay Directors fees and bonuses payable or can they stay payable for say 2 years.

Choke, gag, O MY GOD, NO.


"Six months"

But to be honest...... they have been know to be forgotten about but have made it on to the T4 before a Year is up and before the next T4's
Spank me now Joe and Bert for admitting it. LOL

I would suggest that you place on the T4's now, and since it is after Feb 29 deadline, complete amended T4's and clear them off the Balance Sheet.

[Joe]

Rola, on Feb 29 2008, 09:14 PM, said:

Is there a time limit on when to pay Directors fees and bonuses payable or can they stay payable for say 2 years.

Refer to S78(4).

The legal cure is re-filing corrected corporates for 2 years, possibly 3.
In addition it might mean the SHL is in debit balance.

The illegal cure would be David's .... ;)


Items to bear in mind:
- legal exposure of the client to CRA
- legal exposure of the Accountant to the client
- legal exposure of the Accountant to CRA

.

[David Blue]

I know it is not perfect or exactly correct...........but.........
As the bonus/fees have been missed. instead of opening up a can of worms I would still take a shot at putting them on the current T4
I would own up to the error to the client, and tell them how I propose to to fix

or if your the new accountant taking over a file.....

Suggest to your new client that they should have the Old Accountant contact his/her Insurer and start refiling everything. (per Joe)
Or
Contact your Insurer and start re filing everything.


Either way no one wins in this stituation. Well CRA wins, with Penalties and Interest.

and since we are on this subject / Joe, quick question or work around requested / your thoughts please....

Files come in late..new clients late... over a year late..T2's....You have to clear shareholders loans to nil. example $ 100,000 draw mix of T4's / T5's Corporation is taxable,,

If you file T4's late you could get up to a $ 2,500.00 late filling penalies, Interest ..., T5's late, penalty. If you try to pass through as others have as Management Fees, Place on T1 as Business Income, This is also incorect and against the act.

Doe's anyone have a work around that is within the act ? or is this one of those situation where the client has to learn the hard way?

[spenceh]

snowplowguy, on Mar 1 2008, 08:50 AM, said:

Well.... I would be extremely hesitant to ever file a balance sheet with a Shareholder's loan receivable.... but if your T2 is only one year late I suppose you could use 15(2)(b ) to squeeze out a year's grace. You will still have to consider the 80.4 interest benefit though.

Per ITA:

Unpaid remuneration and other amounts
(4) Where an amount in respect of a taxpayer’s expense that is a superannuation or pension benefit, a retiring allowance, salary, wages or other remuneration (other than reasonable vacation or holiday pay or a deferred amount under a salary deferral arrangement) in respect of an office or employment is unpaid on the day that is 180 days after the end of the taxation year in which the expense was incurred, for the purposes of this Act other than this subsection, the amount shall be deemed not to have been incurred as an expense in the year and shall be deemed to be incurred as an expense in the taxation year in which the amount is paid.

David Blue, on Feb 29 2008, 10:48 PM, said:

"Six months"

Don't get caught with six months: Jan - June is 181 days/182 in leap years. July to Dec is 184 days...

[chris_chris]

Hi,

I am a CASB student (Mod 1). I'm new to these boards. Trying to figure out how regularly people check/post on here to see if it's actually going to be useful to be a member on here.

I have a question regarding bonuses payable.

How is the 180 day rule enforced? If a company has a December 31 year and accrues a bonus to its sole shareholder on the balance sheet, how will anyone know whether or not it was paid within 180 days as long as the shareholder includes it in income on his 2009 T1 and it is gone from the company's B/S by its 2009 Y/E?

[JohnNP]

chris_chris, on May 9 2009, 10:12 PM, said:

Hi,
I am a CASB student (Mod 1). I'm new to these boards. Trying to figure out how regularly people check/post on here to see if it's actually going to be useful to be a member on here.
I have a question regarding bonuses payable.
How is the 180 day rule enforced? If a company has a December 31 year and accrues a bonus to its sole shareholder on the balance sheet, how will anyone know whether or not it was paid within 180 days as long as the shareholder includes it in income on his 2009 T1 and it is gone from the company's B/S by its 2009 Y/E?

how will anybody know if you shop with a big coat at london drugs and steal things and conceal them in your coat pockets?
although the rcmp could possibly miss you the first day, when they find you they'll get you for all of them

you have chosen the wrong occupation