Should You Crystallize Your Capital Gains Before the Tax Hike?
As the deadline approaches for the capital gains tax hike on June 25, 2024, investors are contemplating whether they should take action to crystallize their gains at the lower 50% inclusion rate before it increases to two-thirds. Here are some common scenarios and strategies to consider before the deadline.
Investor Strategies Before the June 25 Deadline
For investors with significant accrued gains in their portfolios, crystallizing gains at the current 50% inclusion rate is a viable option. By selling positions on the open market and immediately buying them back, investors can take advantage of the lower tax rate. It’s essential to be mindful of the June 25 deadline and settle trades before that date to qualify for the lower inclusion rate.
Considerations for Cottage Owners, Elderly Investors, and Professional Corporations
Cottage owners, like Debbie, who have accrued substantial gains in their properties, may consider transferring ownership to trigger the gain before the deadline. Elderly investors sitting on considerable gains should consult their tax advisors to evaluate the benefits of realizing gains before June 25. Additionally, professional corporations, such as those owned by doctors or lawyers, should reassess the advantages of incorporating their practices in light of the upcoming tax changes.
In conclusion, with the capital gains tax hike looming, investors, cottage owners, and corporations should evaluate their options and consider crystallizing gains before the June 25 deadline to maximize tax savings. Consult with a financial advisor or tax professional to determine the best strategy for your individual circumstances.
