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Hi, I would like to thank you for sharing your extensive knowledge with us. Do you ever have webinars that we could register for? My question is if our Corporation has purchased a house which requires quite a bit of work, which will be done by shareholders and some work outsourced. Cost of the house was 125,000 and we plan to spend approx 25,000 and also hope to sell for 230,000. What would the corporate tax in this be?
Thank you for your positive feedback. We do host webinars occasionally, which we post to our blog: http://madanca.com/blog
The corporate capital gains tax rate of 25% will be applied to the profit of $80,000 made on the sale of the property by the corporation. This amounts to $20,000 of capital gains tax. Note that one half of the capital gain can be paid tax-free to the shareholders through the Capital Dividend Account (CDA). You must obtain CRA's approval before paying a Capital Dividend.