Bankruptcy and taxes on capital gains/income.
July 19th, 2007 by Questions
When a bankrupt\’s assets are liquidated how are the capital gains and accumulated income taxed? Are they included in the pre-bankruptcy return filed by the trustee or the post-bankruptcy return?
If the bankrupt is the sole owner of a CCPC what happens to the tax liabilities of the corporation when the trustee assumes control? At that point how are shareholder loans treated? As debt of the bankrupt or taxable distribution to the bankrupt?
And how does the bankrupt treat the transfer of ownership? As a tax-free sale of shares or taxable liquidation? Again are the tax liabilities included in the pre or post bankruptcy return?