ACC 742 Lecture Notes - Lecture 5: Employee Stock Option, Capital Loss, Capital Gain
20 Apr 2016
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3 categories of capital property (pup, lpp, financial) & other properties. Recall that a gain or loss on sale of property can be a business or capital transaction. Principal factor is intended use of property. Buy it to use it" capital asset (disposition results in capital gain or capital loss) Buy it to sell it" business asset (disposition results in business income or loss) Capital gains/capital losses are taxed at 50%, i. e. taxable capital gains represent 50% of a capital gain, and allowable capital losses represent 50% of a capital loss. Taxable capital gains are netted against allowable capital losses that arise in the same year, and any positive amount is included in s. 3(b). Business investment losses are a special kind of capital loss, and are deductible against any kind of income in s. 3(d). 50% of business investment losses are deductible, i. e. allowable business investment losses (abils).
