Michael is self-employed and operates an incorporated business. When assessing his income for mortgage qualification, a lender might consider his T4 salary and dividends. What other financial document would be crucial for the lender to review to further verify his income and the health of the business?

Question: Michael is self-employed and operates an incorporated business. When assessing his income for mortgage qualification, a lender might consider his T4 salary and dividends. What other financial document would be crucial for the lender to review to further verify his income and the health of the business?

Answer options:

• His personal bank statements for the last 6 months. ✅ The corporation's T2 Corporate Income Tax Returns and financial statements.
• His annual notice of assessment (NOA) only.
• A letter from his accountant confirming his projected income.

Correct answer: The corporation's T2 Corporate Income Tax Returns and financial statements.

Explanation: For an incorporated self-employed individual, reviewing the corporation's T2 Corporate Income Tax Returns and corresponding financial statements (e.g., Statement of Income and Statement of Retained Earnings) is crucial to understand the business's profitability and its ability to sustain the salary and dividends paid to the owner.