u/Objective-Raccoon-12

I've got a situation where a Corp A needs to be dissolved but it has outstanding loan due to Corp B. The complication is that Corp A has two minor shareholders that are arm's length so I'm not sure best approach.

Below is the breakdown of the corporations:

• Corp A
  • Loan due to Corp B: 300K
  • inactive otherwise with no assets
  • Common shares
    • Person 1: 85%
    • Person 2: 5%
    • Person 3: 15%
  • preferred shares
    • Corp B: 85%
    • Person 2: 5%
    • Person 3: 10%
• Corp B:
  • Common shares
    • person 1: 100%

We want to dissolve Corp A without triggering debt forgiveness rules. To that end, I was thinking of having Corporation B take back and cancel the preferred and common shares of Person 2 and Person 3 at cost. This would leave person 1 owning 100% of shares in both Corp A and Corp B at which point Corp A gets amalgamated into Corp B. Does this make sense and is there any risks to this? Is there an easier way of dissolving Corp A without triggering debt forgiveness?

I have a situation where an insolvent corporation is changing shareholders and both shareholders are individuals, not corporations. The current shareholder (shareholder A) has a credit shareholder loan balance of 100K. The other shareholder (shareholder B) is taking 100% ownership of the company, and the previous shareholder (A) is stepping away from the business for health reasons. As part of the ownership change, shareholder A will surrender their shares back to the corporation. As part of this agreement, shareholder A will transfer their 100K shareholder loan balance to shareholder B. After everything is done, shareholder B will have 100% ownership with a 100K shareholder loan balance that shreholder B can take in the future tax-free (assuming the corporation is making money again in the future).

Would there be any issues with this agreement and transfer? Everything I've found is about cases where the shareholder owes the corporation, not in cases where its the corporation that owes money to the shareholder.

Hard to find anything online about this, so here it goes, I'm trying to figure out the tax implications to the buyer and seller in a scenario where:

1. Seller of CCPC corporation sold their common shares to step kids for 1M, the step kids are taking over the business
2. From the 1M, 0.7M is in promissory notes with remainder in cash
3. LCGE of 1M claimed by seller for the share sale
4. 5 years later, the 0.7M promissory notes are gifted back to the same corporation that issued the preferred shares

How would the 0.7M gifted notes be treated from a tax perspective by the original seller and the corporation that receives them in 5 years?

Edit: changed preferred shares to promissory notes