Capital gains are attractive because they are taxed at only 50% of normal tax rates. Did you know that there are also other potential advantages associated with capital gains?

If you own shares of a "qualifying small business corporation", when the time comes to sell them, you may be eligible to use the capital gains exemption. Essentially, if you own eligible shares of a privately-owned Canadian corporation, and have held them for at least 2 years, you may be able to shelter from tax up to $500,000 of capital gains resulting from the sale of the shares.

Similarly, if you sell "qualifying farm property", you may be able to shelter from tax up to $500,000 of capital gains arising on the sale of the farm property.

Each individual taxpayer has a lifetime capital gains limit of $500,000. Therefore, a taxpayer can shelter a maximum of $500,000 in capital gains over his or her lifetime.

To discuss tax planning utilizing this exemption, contact your local DJB office.