Tax Tips - Personal Tax Returns: Capital Gains

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=90 BGCOLOR="#C0DCC0" TEXT="#080000" bgproperties="fixed" background="0c060961excgdu.jpg"> <div> <B>STOROSZKO & ASSOCIATES</B><FONT SIZE="1" COLOR="#000000" FACE="Arial" >   |   </FONT><FONT SIZE="1" COLOR="#FFCC33" FACE="Arial" >  </FONT><FONT SIZE="2" COLOR="#FFCC33" FACE="Arial" ><A HREF="index.htm" TARGET="_top" TITLE="STOROSZKO ASSOCIATES">HOME</A></FONT></div> <div> </div> </td> </tr><tr> <td valign="top" width=195 BGCOLOR="#C0DCC0" TEXT="#080000" background="0bf12163.jpg"> <div> <A HREF="tax_tips.htm" TARGET="_top" TITLE="STOROSZKO ASSOCIATES Tax Tips">Tax Tips Home</A></div> <div> <A HREF="income.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: Income">Income</A></div> <div> <A HREF="deductions.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: Deductio">Deductions</A></div> <div> <A HREF="credits.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: Tax Cred">Tax Credits</A></div> <div> <A HREF="filing.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: Installm">Filing</A></div> <div> <A HREF="deadlines.htm" TARGET="_top" TITLE="Tax Tips Tax Planning and Filing Deadli">Tax Planning and Filing Deadlines</A></div> <div> <A HREF="rrsp_tips.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: RRSP Ti">RRSP Tips</A></div> <div> <B>Capital Gains</B></div> <div> <A HREF="benefits.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: Tax Bene">Tax Benefits</A></div> <div> <A HREF="pensioners.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: Pensione">Pensioners</A></div> <div> <A HREF="usa.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: United S">USA Tax</A></div> <div> <A HREF="investing.htm" TARGET="_top" TITLE="Tax Tips Personal Tax Returns: Investin">Investing</A></div> <div> <A HREF="business.htm" TARGET="_top" TITLE="Tax Tips Business Tips: General Busines">Business Tips</A></div> <div> <A HREF="hst.htm" TARGET="_top" TITLE="Tax Tips Business Tips: HST Provincial">HST</A></div> <div> <A HREF="gst.htm" TARGET="_top" TITLE="Tax Tips Business Tips: Goods Services">GST</A></div> <div> <A HREF="payroll.htm" TARGET="_top" TITLE="Tax Tips Business Tips: Payroll">Payroll</A></div> <div> <A HREF="new_tax.htm" TARGET="_top" TITLE="Tax Tips New Tax Items">New Tax Items</A></div> <div> <A HREF="tax_records.htm" TARGET="_top" TITLE="Tax Tips How Long Should I Keep My Tax ">Tax Records</A></div> <div> <A HREF="file.htm" TARGET="_top" TITLE="Tax Tips Should You File a Tax Return?">Should You File a Tax Return?</A></div> <div> <A HREF="small_business.htm" TARGET="_top" TITLE="Tax Tips Small Business Start Up Tips">Small Business Start Up Tips</A></div> <bR> <bR> <div> The tax tips presented, and the rates provided, are only applicable to the dates the tax tips are presented and updated and they may change at any time.  Please use the tips for general information only and obtain professional advice and updates from Storoszko & Associates at 647 367-3477 or your professional tax advisor.</div> <bR> </td> <td valign="top" height=390 width="100%" BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <I>Tax Tips - Personal Tax Returns: Capital Gains</I></div> <bR> <div> <B>CAPITAL GAINS</B></div> <div> Since 1994 all sales of capital assets are subject to tax on capital gains.  The difference between the purchase price and the selling price less expenses are included on your tax return as capital gains.  Until February 27, 2000, the taxable capital gain was  75% of the capital gain.  Between February 27, 2000, and October 18, 2000, the taxable capital gain was  66.66% of the capital gain.  After October 18, 2000, the taxable capital gain is 50% of the capital gain. </div> <bR> <div> Effective June 24, 2024 the taxable gain rate has changed for individuals, corporations and trusts.  For corporations and some trusts, 100% of the capital gain is taxable (for any gains subsequent to June 24, 2024).  For individuals and some trusts, 66.66% of the capital gain up to $250,000.00 is taxable and 100% of all capital gain over $250,000.</div> <bR> <div> The taxable capital gain is included on your tax return and taxed at your marginal tax rate.</div> <bR> <div> <B>CAPITAL GAINS TAXATION</B></div> <div> Capital gains are the difference between the selling price of any capital property less costs of the sale, the original purchase price and any additional capital costs of owning the property.  Capital property can include; rental property, commercial real property, shares, certain bonds, tangible property (precious metals, vehicles, etc.).  If you have a capital loss (negative capital gain) the capital loss many be carried back for three years against capital gains previously calculated, or carried forward indefinitely.</div> <bR> <div> <B>ROLLOVER OF CAPITAL GAINS</B></div> <div> If you sell real property comprised of commercial real estate used in a business or in farming you may take advantage of a roll over provision for replacement property.  If you buy a replacement property with a similar use to the real property you have sold you can defer the capital gains and amortization taken on the original property proportionately to the value of the new property purchased.  For example if you own a factory in one city and wish to move to another city, you can defer the gain on the sale of the first factory against the cost of the second factory.  These provisions apply in every case where the properties are used.</div> <bR> <div> <B>CAPITAL GAINS TAX PLANNING</B></div> <div> Taxable Capital gains on assets you have owned for a lengthy period taxed at your marginal tax rates can create large tax bills.  There are several ways to reduce your taxes in the year you realise capital gains.  You can realise losses on assets worth less than when you bought them to reduce the gain.  You can use RRSP contributions to your contribution limit in the year of sale.  During the years you own real estate you can plan the deduction of capital cost allowance.  You can time your sales if you own more than one asset to spread the gains over more than one year.  It is important to see your tax professional for advice when thinking of selling assets subject to capital gains.</div> <bR> <bR> </td> </tr></table></body>