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.

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