Jan
30

Q&A: capital gains?

Question: capital gains?
when selling business how much capital gains do you pay.

Best answer:

You are taxed on 50% of the capital gain at your marginal tax rate. This will vary depending on the province of residence. If we are talking a significant gain assume 48% marginal tax rate top so you would pay tax at 24% 1/2 of the 48.

The capital gain is proceeds less your cost base. if the business is a corporation and you are selling the shares of the corporation, they may qualify as a QSBC qualified small business corp and entitle you to a capital gains exemption that could shelter up to 750,000 of gain.

See a tax professional on how best to structure the sale to minimize the taxes.

Add your own answer in the comments!

About Kristofer Nance

Kristofer Nance, Real Estate Broker with Nance & Associates, Realtors in Fredericksburg VA
Owner/Agent of Nance & Associates, Insurance.

Comments

  1. CanadianBlondie says:

    I would agree with the other poster. In addition, certain things you sell might not be considered capital gains, and the sale of some items might be considered business income (intagibles like goodwill, and the sale of inventory is business income as well).

  2. All depends on the acb of you shares if its incorporated.

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