By : Jerry – The Easy Tax Guy

Income Tax Act s. 3(b), 111(1)(b), 111(2)

Compress Capital Gains

Only 50% of a capital gain is taxed, and the gain is not included in income until the item is sold, allowing you to compound your returns tax-free until you sell.

A capital gain or loss is the gain or loss resulting from the sale of a capital asset, such as stocks, bonds, art, stamp collections, and real estate.

If you have huge Capital Gains, then Easy Tax Canada can help you to reduce the capital gains tax. There are various strategies to do this.

Capital losses can normally only be used to reduce or eliminate capital gains.

They cannot be used to reduce other income.

If you have capital losses that cannot be used in the current year,  you can carry back the losses to any of the 3 preceding taxation years.

Capital losses can also be carried forward indefinitely.

Some assets are considered personal-use property, such as cottages, cars, boats, and furniture.

Some personal-use property is considered listed personal property (LPP), such as works of art, and stamp collections.

Very Important : You must do proper Tax Planning to minimize your taxes.

The gains and losses for personal-use property and LPP are calculated separately from gains and losses on other capital assets.

See our articles on Listed Personal Property and Personal-use Property for more information.