How to declare income?

17 years ago Client sold his shares in small business Canadian corporation to Mr. A. with the condition that Mr. A.'s business buy $150,000. of goods per year from client's new business until client turned 65 or retired. There was a buy out clause for 75,000 per year, available for the last four years of the contract if either party wanted out of the  contract. Client triggered that buy out when he retired early and sold the "new" business to a 3rd party. Now he is getting $75,000. per year from 2016-2019.

How does he declare that amount on his tax return now that he no longer has the "new" business? Is it considered self employed business income (with no offsetting expenses) on which he has to pay and submit CPP?



No answers have been posted

More Actions

People come to ProFile for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: