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we are seeking advice in regards to the inheritance of a Corporation among 5 children. as we understand it, there will be substantial capital gains taxes to pay to bring the realestate up to current values. Is there value to buying into the family corporation beforehand, or another way to avoid triggering a taxable event?
thanks for your time.
Hi Dave,
I'm assuming that the real estate is located in Canada and that the corporation that owns it is a Canadian Controlled Private Corporation. To reduce estate taxes payable upon the death of the current shareholders, consider implementing an estate freeze now. By doing so, the value of the existing shareholders' shares will be capped to the current value of the real estate (less liabilities). The increase in value in the real estate after the estate freeze is implemented will accrue to the 5 children, who become the new common shareholders as part of the estate freeze process.