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One of the more generous aspects of Canadian taxation is the Lifetime Capital Gains Exemption (LCGE). For the 2020 tax year, if you sold Qualified Small Business Corporation Shares (QSBCS), your gains may be eligible for the $883,384 exemption. However, you need to submit the appropriate form and documentation, as the exemption is not automatic.
If you disposed of qualifying property during the year and want to claim your exemption, you will need to fill out form T657, Calculation Of Capital Gains Exemption.
To do so, you will need to know your:
- Proceeds of Disposition – The proceeds of disposition is the price you sold the property for plus any fees associated with the sale
- Adjusted Cost Base. The adjusted cost base is the price you paid for it plus any capital improvements that you made.
You will also need to know what portion, if any, of the exemption you may have used in the past. If you do not know this information, you can contact the CRA and they will be able to provide this information. It can also be found on your CRA’s My Account online.
For more information please check: Claiming the Lifetime Capital Gains Exemption (LCGE)
If you need any further clarifications, we would be glad to assist you by having you contact us by phone or via Facebook or Twitter.
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