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gr5248
Oct 21, 20221 min read

Lifetime Capital Gains Exemption​​

Another tax advantage of incorporation is the $913,630 capital gains deduction on the sale of shares of a qualifying small business corporation. One of the qualifications is that the corporation must be a CCPC with active business income. The lifetime capital gains exemption (LCGE), which equates to a $456,680 lifetime capital gains deduction (1/2 of the $913,630 LCGE). The deduction can be claimed against taxable capital gains on the disposal by an individual of:​​

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- qualified small business corporation (SBC) shares​

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- qualified farm property, and

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- for dispositions occurring after May 1, 2006, qualified fishing property​

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This includes exemptions for small business corporation shares, farm property, fishing property, and any capital gains exemptions used in 1994 or earlier. The calculation of the deduction is done on CRA's form T657.

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