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by admin
on December 18, 2024

The taxman is electing newrules regarding capital gains taxation, increasing  inclusion rate and defining rules for “flipping” properties.

Have impact the taxpayers

1. Flipped Property Rules: A Closer Look

Starting January 1, 2023, properties held for less than 365 consecutive days before disposition are generally considered “flipped,” unless they were part of your business inventory.

    • Fully taxable as business income, not as a capital gain.
    • Deemed to be nil any losses cannot be used to offset other income.
    • Certain life events may qualify for exceptions to these rules – death transfers to beneficaries.

2. Increased Capital Gains Inclusion Rate

Starting June 25, 2024 the taxpayer Capital gains exceeding $250,000 per year will be included in income at a two-thirds rate (previously one-half).

For corporations and most trusts: All capital gains will be included at a two-thirds rate.Considerations:

    • Lifetime Capital Gains Exemption: This exemption is being increased to mitigate the impact of these changes on most middle-class entrepreneurs.
    • Canadian Entrepreneurs’ Incentive: A new incentive program will encourage investment in capital-intensive and high-growth sectors.

What’s Not Changing (Important Clarifications):

  • Principal Residence Exemption: Remains unchanged.
  • Tax Elections on Paper Realizations: No changes to the requirement for an actual legal transfer of property to trigger a capital gain.
  • Capital Gains Averaging: Cannot be used to stay below the $250,000 annual threshold for individuals.
  • Sharing the $250,000 Threshold: Individuals cannot share this threshold with corporations they own.
  • Exemptions for Specific Assets or Corporations: No exemptions from the two-thirds inclusion rate.
  • Time-Based Distinctions: The two-thirds rate applies uniformly to all capital gains, regardless of holding period.

NEED HELP! Income Tax returns

We are continuously update looking to see this is officially enforced when you are selling your rental properties, or business owners

with company assets.  If you are a corporation with family shares or assets please see TOSI (Tax On Split Income in a corporation) this affect the taxpayer.

Please complete busienss owners: Become A Client or Taxpayer

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