September 10th, 2005 by Questions
Are amounts owed to Revenue Canada eliminated in a bankruptcy? Are the fess
paid to a banruptcy trustee tax deductible?
September 12, 2005 at 9:00 am, Barton Goth, GCO Inc. Bankruptcy Trustees said:
In most circumstances amounts owed to Revenue Canada are eliminated in a bankruptcy but it would be important to discuss the nature of these debts with your trustee to ensure they are not given unique treatment under the Bankruptcy and Insolvency Act. I would recommend contacting a trustee immediately as a delay on your part can provide Revenue Canada with additional time that can allow them to take measures that cannot be reversed in a bankruptcy proceeding (i.e. if Revenue Canada registers a statutory lien on any real property this then acts like a second mortgage and survives bankruptcy). In terms of trustee fees being tax deductible, unfortunately they are not.
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