Where on the T2 related Schedules do I put the amount of refund due for the carry back, to ensure business income and balance is accurate (for next year, for example Retained Earnings is increased due to refund)?
Example: The business operated at a loss, so zero tax is owed, and the carry back refund to be received by business is $2000, and the refund is not taxable income.
1. On Schedule 125 Income Statement, do I claim a Current Income Taxes expense (line 9990) of $2000 and on Schedule 100 Balance Sheet claim a Taxes Receivable (line 1066) of $2000? (but this seems to double the income loss)
2. Or, on Schedule 100 Balance Sheet, do I claim both a liability Taxes Payable (line 2680) of $2000 and a Taxes Receivable (line 1066) of $2000? (but then Retained Earnings do not reflect the refund)
3. Or… how do I do this (so that it balances overall without being reflected as part of final taxable income)?
PS: I tried putting the value in 9990 as a negative number and in 1066 as a positive value, and it carried to Schedule 1 as a negative value (the true loss value), but when this was submitted, the CRA did not give a refund per Schedule 1, they based it on values in the Schedule 100 & 125. So, almost the entire refund was negated, and the schedules are wrong (because the refund was not received).