Can Corporation`s Bank Statement be Used as Proof of Downpayment?

[Nir]

Hi All,

We know that a personal bank statement (say $50K balance) can be used by the buyer as proof of down payment when buying a property under a corporation.

Is the opposite true too? meaning is a corporation`s bank statement* (say $50K balance), acceptable by the bank a proof of down payment when buying a property under buyer's name?

THANKS.



*obviously a corporation owned by the buyer. but buyer buys under his name not involving his corp. in this transaction.

 

[Alvaro Sanchez]

Yes, you can.. That is, corp funds to buy in person name. Your accountant would have to provide a letter indicating if the funds will be salary, dividend, LOAN, etc.



Be aware that a paper trail is created by these transactions so you must consider your options; not only for the bank but CRA.

 

[Thomas Beyer]

[quote user=investmart]is a corporation`s bank statement* (say $50K balance), acceptable by the bank a proof of down payment when buying a property under buyer's name?


When you take money out of a corporation it is either:

a) a loan, that must be repaid, or

b) a dividend, with taxes payable, or

c) income/management fee with taxes payable



Thus, ensure you also tell the bank how you will classify this money to you, the recipient. Then most banks (but not all) will likely accept that as enough proof of funds, assuming some reserve for taxes payable !