Schedule 13, Continuity of Reserves

Schedule 13, Continuity of Reserves

You have to complete Schedule 13 to show the continuity of deductible reserves. Indicate, on the appropriate lines, the prior-year and the current-year reserves as well as the reserve transferred from an amalgamation or wind-up. If your corporation or the predecessor corporation deducted a reserve amount last year, add that amount to current-year income and establish a new reserve amount.

Complete Schedule 13 as follows:

Part 1 - Capital gains reserves

Establish the continuity of reserves for each different property. Unlike other reserves, you have to report the total capital gain reserves that you and the predecessor corporation deducted last year. Add the current-year reserve on Schedule 6 to calculate the current-year capital gain. See page 42 for more details.

Part 2 - Other reserves

In this part, establish the continuity of the following reserves:

• reserve for doubtful debts

• reserve for undelivered goods and services not rendered (except for reclamation obligations)

• reserve for prepaid rent

• reserve for returnable containers

• reserve for unpaid amounts

• other tax reserves

Enter, on line 125 of Schedule 1, the total of the balance of your reserve at the beginning of the year (line 270 of Schedule 13) plus the amount of reserve transferred on wind-up/amalgamation (line 275 of Schedule 13).

Enter, on line 413 of Schedule 1, the balance at the end of the year (line 280 of Schedule 13).

References
IT-152, Special Reserves - Sale of Land
IT-154, Special Reserves
IT-442, Bad Debts and Reserves for Doubtful Debts

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