How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Legal Ease Your Own Question
Legal Ease
Legal Ease, Lawyer
Category: Canada Tax
Satisfied Customers: 99527
Experience:  Lawyer
10263656
Type Your Canada Tax Question Here...
Legal Ease is online now
A new question is answered every 9 seconds

I have sold my s corp company for $500000 and buying stake

Customer Question

i have sold my s corp company for $500000 and buying stake in another company for $400000, what will be my tax liability
Submitted: 1 year ago.
Category: Canada Tax
Expert:  Legal Ease replied 1 year ago.

What was the acquisition price of the shares in the first company that you sold?

Customer: replied 1 year ago.
I was holding that company from 1993, every year i'm withdrawing my profits and paying taxes
Expert:  Legal Ease replied 1 year ago.

Yes. But to know what tax you have to pay I have to know what the acquisition cost is and then the sale cost.

Customer: replied 1 year ago.
there is no acquisition cost
Customer: replied 1 year ago.
even the sales cost
Expert:  Legal Ease replied 1 year ago.

You have to valuate the shares at the time you acquired them. Then you have to take what you're selling the shares for. You subtract and that is the capital gain.

One half of the capital gain has to be declared as income for tax purposes on your income tax return. It does not matter where the profit is going. That does not reduce your taxes.

There may be other ways to reduce he capital gains but that is a complicated situation and you need to speak to your own tax accountant to get that help.