The LCGE has a cumulative lifetime limit, so you can apply for the exemption multiple times, until you reach the cap.įor example:You sell shares of a small business in 2021 and turn a profit of $500,000. Without the LCGE, you would have to pay taxes on half of this amount, i.e., $450,000. However, as only half of the realized capital gains is taxable, the deduction limit is in fact $446,109.įor example:You sell shares of a small business corporation in 2021 and make a $900,000 profit (also called capital gains). If you sell qualifying shares of a Canadian business in 2021, the LCGE is $892,218. For many small business owners, it’s a tool to help them save for retirement or invest more in another small business. When you make a profit from selling a small business, a farm property or a fishing property, the lifetime capital gains exemption (LCGE) could spare you from paying taxes on all or part of the profit you’ve earned.
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