Lewis PowellClarity Expert

Business Consultant, business executive, board member, Entrepreneur, and Mentor. Passionate about helping others succeed.

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In regards to your first question make sure you have photocopies of all cleared checks and credit statements. That should be sufficient when reporting statements to the IRS. For question 2, yes you can. Make sure you keep track of your personal deposits in your business.

Surround yourself with smart people and make sure you have adequate working capital.

Hi- I am not familiar with the tax implications in Canada because I am located in America. However, if you were in the united states and you sold an asset there would be a tax implication there. Never the less, this would clear up any debt you have. Option 1 would be a good choice. As it relates to option 2, there could be a tax implication here and I would prefer this option over option 1. Having a loan assignment to your business would create an obligation to repay the loan based on the loan payment terms. If you are the sole owner of the company, you can choose to forgive the loan and simply pay the taxes that are due for the income received. I like this option better because the 8k loan from your business and the personal asset sale for 10k will leave you a net amount of 18k. you now have enough to pay off the 18k in debt. Your debt will be reduced from 18k to 8k and instead of owing it someone else you owe your business. You can choose to write that debt off and pay the income taxes.

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