How can Real Estate Investors reduce Capital Gains Taxes? OnTrack Accounting & Bookkeeping, a 5-times ThreeBestRated® award-winning Accounting Firm from Oakville, shares

Buying real estate as an investment is a significant step and also one of the most valuable purchases you can make. With sufficient time and work, it can be an excellent source of income. But, before you start dreaming of becoming a real estate tycoon(Sounds great, right?), you must first learn the fundamentals. One of the most vital fundamentals in Real Estate investment is T-A-X! Ah yes, TAXES! Especially Capital Gains Taxes!

Capital gains tax is due when you sell an asset or investment for more than what you paid for, with 50% of the difference added to your regular income. In Canada, there are a few exemptions that may allow you to reduce your taxes, depending on a bunch of factors. Reflecting on the matter, OnTrack Accounting & Bookkeeping, a 2022 ThreeBestRated® award-winning Accounting firm shares: While opening a registered account to shelter investments and using the principal-residence exemption to reduce capital gains tax are two basic tax-saving approaches. There are more into Capital Gains Taxes that you should be aware of:

The Basics:

• You have to declare capital gains when you sell property or investments for more than you paid.
• The inclusion rate is the same for everyone, but the tax amount depends on your total income, personal situation, and your province of residence.
• There are no capital gains triggered on the sale of your principal residence.
• Capital gains are calculated based on the market value of the asset sold less the cost of acquiring that asset.

Timing Your Transaction:

Choosing the time of sale for your investment assets can be a powerful tool for tax reduction.

Charitable Donations – Gifts – Giving Away Assets:

You can use donations or gifts to reduce your capital gains tax. You could save money by giving away an asset that has generated a loss but wants to keep in the family. It produces a capital loss that you can apply to gains from other investments.

Lifetime Capital Gains Exemption – LTCGE:

If you own a farm property over an extended period, it presumably increases in value. You may sell and, for example, retire. When this is the case, you may be completely exempt from tax if you sold qualifying property and your gains are roughly up to $900,00.

About OnTrack Accounting & Bookkeeping – ThreeBestRated® Accounting Firm in Oakville

Established in 2010, OnTrack Accounting is an independent accounting, bookkeeping, and tax firm which specializes in helping small & medium-sized enterprises overcome their day-to-day challenges balancing their books, processing payroll, and filing their corporate and personal taxes.

They are a professional Tax Accountant firm located in Oakville providing tax planning, accounting, and corporate income tax services in the Greater Toronto Area. They work with clients to create an effective tax planning strategy to use all allotted exemptions and defer capital gains as much as possible.

On receiving the 2022 ThreeBestRated® award for one of the best Accounting firms in Oakville, Mina Hanna, the founder, and president of OnTrack Accounting & Bookkeeping, says,” This is our 5th year in a row! We are very honoured and humbled to be one of the ThreeBestRated® Accounting firms in Oakville. I want to extend my thanks and gratuity to our valued clients who put their trust in our services and, of course, our team whom I am very proud to be working along.

To know about OnTrack Accounting & Bookkeeping or their services, visit https://accountingontrack.ca/.

About ThreeBestRated®

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