Ch. 20 - Lifetime Capital Gains Exemption

Question 1

LCGE - least of three amounts

Answer 1

1. unused LCGE
2. annual gains limit
3. cumulative gains limit

Question 2

Unused LCGE

Answer 2

• LCGE is $883,384, therefore unused deduction is $441,692 (1/2 of total)

Question 3

Annual Gains Limit

Answer 3

equals capital gain less net capital losses claimed not allocated to other capital gains

Question 4

Cumulative Gains Limit

Answer 4

the cumulative net investment loss is the extent that investment expenses outweigh investment income

Question 5

QSBC Criteria

Answer 5

1. The corp must be a SBC
2. the shares must be owned by the taxpayer, their spouse, or partnership related to the taxpayer
3. shares must not have been owned by anyone other than the taxpayer or a related person in the last 24 months
4. throughout the prior 24 months, 50% of the FV of the assets must have been used primarily in an active business

Question 6

SBC Criteria

Answer 6

1. must be a CCPC
2. all, or substantially all (90%) of the FMV of assets are:
   a) used primarily (at least 50%) in an active business carried on in Canada; or
   b) invested in shares or debt of a SBC that is connected with the corporation