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Transferring Corporate Losses to a Personal Tax Return


Synergy Group (2000) Inc.

Synergy Group (2000) Inc. would offer to an individual a percentage in a limited partnership. If the limited partnership showed a profit, the individual gets business income and pays taxes on it. If they show a loss, the individual gets a business loss that would save them taxes. There would pretty much always be losses and Synergy would issue paper work showing losses amounting to five times the value of what the individual invested.

As an example, purchasing $15,000 in shares would amount to a $75,000 loss, so the $15,000 investment would produce a $25,000 tax refund, assuming the individuals tax rate is 33 percent.

Synergy Inc. Went out and purchased corporate losses from existing corporations (which is legal) and transferred these losses to the partnership (which is not legal). Then the tax payer tried to claim the partnership loss which was not created by the partnership.

CRA might let this ride and pay a refund for a few years (3 or 4) but after that they will have the individual charged with gross negligence and have them court ordered to repay the tax refunds back as well as pay fines amounting to much more than what was invested.

Ontario and Alberta Securities Commission has ordered Synergy Group (2000) Inc. (as well as four other corporations run by their owners) to stop selling small business shares to individuals. They also were fined huge multimillion dollar penalties paid to the securities commission (and kept by them). Even though these enforcements have taken place they are still selling their tax shelter scam and their web sites are still on the internet.

The bottom line, and reason why this is an illegal tax shelter is because it is illegal to transfer corporate losses to an individual, plainly and simply said.

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