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Capital Gains Exposure

Is there a capital gain exemption for corps? The situation is a liquor license is being sold for a lot of money; the owner was told the first $750K would be exempt from capital gains. I am looking to CRA for confirmation but thought I would pose the question here.

The $750k - which is now up to almost $900k actually - is only for the sale of small business shares/farm land. Not general capital gains within the corporation unfortunately. As far as I am aware the capital gain will be fully taxable at the high rate (since it is not subject to small business rates on sch 7) after excluding the normal 50% that is tax free (which will then be paid out tax free as a Capital Dividend). If he sold the company containing the liquor license as opposed to just the liquor license he might be in luck.

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The owner should talk to a professional about corporate restructuring which may allow the sale of shares from a a corporation with the liquor license as the only asset. Depending on the value of the license, it may be worth pursuing but there would be legal and accounting costs.

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