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We, my husband and I, run an incorporated small business. We are both owners and shareholder of the business. The company owns 2 properties, houses.
Can we, upon the winding up the business due to retirement, transfer the properties to ourselves? We really would like to keep them, and prefer not to sell.
Can the transfer be treated as our capital gains and be tax free up to the limit of the allowed lifetime capital gains on closing the business?
If we understand correctly the limit was a bit over $900,000 per shareholder in 2023.
Your response and advice will be greatly appreciated.
Hi KTK,
The properties can be transferred to you, but the transfer price must be equal to the fair market value on the date of the transfer. This could trigger a capital gain. You cannot claim the lifetime capital gains exemption. The LTCGE is available when a shareholder sells his/her Qualified Small Business Corporation Shares.