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Expert: Kevin Tribe
I have a small Canadian Business dong business in Alberta & B.C. The business has never made taxable profits and in fact has numerous losses. I have an opportunity to sell the assets of the business (Including Customer Files). What are the Tax implications on the sale and can the monies received be applied against the former losses?
Kevin Tribe answered:
Yes, former losses will reduce taxes on the proceeds of the sale. The money received from the sale of the assets is income to the company and therefore is taxable to the company.
Tax losses from previous reporting periods would be applied to reduce or eliminate taxes on the income. I would suggest that the individual consult their accountant or tax advisor for advice on what is the most tax efficient way to take the money out of the company based on their personal situation.
About the author
Kevin Tribe is a partner in Pivotal Decisions Inc., a merger & acquisition intermediary assisting the executives of North American I.T. and high tech companies. Their primary focus is finding strategic buyers offering maximum valuations for shareholders.
Their website is www.pivdec.com.