If a company had claimed a dividend amount on their corp tax returned and was issued a T5 but never took the money out of the company, nor did they draw out this amount in the following tax year, what happens to that amount? Can you carry forward this amount to draw tax free out of the company in the next year or is it lost? :confused:

Example: 2007 Corp Year End - $10,000 T5 issued on money to be distributed but the money was not available until 2009 to draw out of the company. Does this amount go on the 2008 income tax return as a carry forward somewhere or can it just be drawn out in 2009 and a journal entry would be made at the time the money is taken out?

If the dividends were never paid they should still be sitting in Dividends payable. When they are paid you would clear the payable and credit cash, but you probably already know that.

What is a T5? I have not heard this term before. That being said if you are talking about someone's personal tax return (in general) taxes are paid based on when the taxable income is received (cash basis) not when it is earned.

Hope this helps,