Tax Tip Of The Week – November 28th

Hopefully, you haven’t, but maybe you’ve had a loss on one of your allowable business investments. An allowable business investment is an investment in a private Canadian corporation that is

:

a) A “small business” corporation that;
a) carries out 90% of its business on Canadian soil and;
b) existed 12 months before the disposition of the investment

While capital losses can only be used to reduce capital gains, you can use 50% of an “allowable business investment loss” to minimize all other types of income. Do note that the disposition cannot be with a person you are in an arm’s length relationship with, i.e. a family member.

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