Shaelene’s Tax Tip of the Week – September 16th

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