Consider speeding up the purchase of depreciable assets for year-end tax planning. A depreciable asset is a capital property on which you can claim Capital Cost Allowance (CCA).
Here’s how to make the most of tax planning with depreciable assets:
- Make use of the Accelerated Investment Incentive. This incentive makes some depreciable assets eligible for an enhanced first-year allowance.
- Purchase equipment such as zero-emissions vehicles and clean energy equipment eligible for a 100 percent tax write-off.
- Consider postponing the sale of a depreciable asset if it will result in recaptured depreciation for your 2022 taxation year.
Qualified Small Business Corporation (QSBC) Share Status
Ensure your corporate shares are eligible to get you the $913,630 (for 2022) lifetime capital gains exemption (LCGE). The LCGE is $1,000,0000 for dispositions of qualified farm or fishing property.
Suppose you sell QSBC shares scheduled to close in late December 2022 to January 2023. In that case, you may want to consider deferring the sale to access a higher LCGE of $971,190 for 2023 and therefore defer the tax payable on any gain arising from the sale.
Consider taking advantage of the LCGE and restructuring your business to multiply access to the exemption with other family members. But, again, you should discuss this with us, your accountant and legal counsel to see how this can benefit you.
Another essential part of tax planning is to make all your donations before year-end. This applies to both charitable donations and political contributions.
For charitable donations, you need to consider the best way to make your donations and the different tax advantages of each type of donation. For example, you can:
- Donate Securities
- Give a direct cash gift to a registered charity
- Use a donor-advised fund account at a public foundation. A donor-advised fund is like a charitable investment account.
- Set up a private foundation to solely represent your interests.
We can help walk you through the tax implications of these types of charitable donations.
Get year-end tax planning help from someone you can trust!
We’re here to help you with your year-end tax planning. So book a meeting with us today to learn how you can benefit from these tax tips and strategies.