ACCOUNTANT EXPLAINS Budget 2024 Tax Changes | New Capital Gains Tax, Small Business Owners, Crypto

[@GabrielleTalksMoney]

Get your FREE Budgeting Template here www.gabrielletalksmoney.com/resources

[@Zilero]

great explanation, thanks for going into the details of the new breaks and corporate impact, not just the $250k personal exemption

[@GabrielleTalksMoney]

you're welcome!

[@aaronpereira8021]

Great!! now there wil be a searious hike in houseing price, no liquidation!

[@lunamorris2091]

Great video! Some key points were highlighted that I hadn't heard anyone else discuss. Thank you!

[@DarwinYerbury]

Great videos. Video idea!! Capital gains tax is fairly easy paying tax on 50%. Dividend income is more complicated with Canadian perfered dividends. Length of time your security is held... over one year is less tax... less then 30 days is more? I was told capital gains is better as dividends claw back child tax payments... do you have a video to allow families of British Columbia to be able to invest more wisely in stocks? Thanks, the channel is very educational

[@mhpc5443]

Great video !! when you mentioned about the crypto currency reporting is it mean that we have to report the crypto accounts in T1135?

[@VirtousStoic]

Tysm❤ keep up the awesome content

[@GabrielleTalksMoney]

You're welcome!

[@vex123]

how did you get $4,500?

[@GabrielleTalksMoney]

It's under the assumption there is no other income other than $70K capital gains, and used a simple tax calculator here www.wealthsimple.com/en-ca/tool/tax-calculator/ontario

[@sauravlahiry6951]

hi sis, so much valuable info

[@davidrockefeller2007]

What if you denounce Canadian citizenship, would you need to pay capitol gains? One couple on KZbin dropped Canadian and picked up Mexican because the capitol gains is only 10%.

[@dealman3312]

Great, my cottages are going to be a problem 🤨

[@chion918]

this is only the beginning, as the deficit grows, and more wasteful government spendings. so far in recent time, personal taxes, carbon taxes, capital gain tax, rain tax, next; property tax, dining tax, working tax, breathing tax, sunshine tax.... etc.

[@silversilk8438]

Didn’t America gain its independence from Britain over stuff like this?

[@oliverf.rupert5408]

One things for sure, more work for accountants. Good woman. 😘

[@LocalMultiplex]

thankfully none of this affects me

[@brian-wood]

I wish it affected me 😅

[@matthewsokalski1969]

Never ever? You'll never own any property or make any investments (outside of your principal residence) that appreciates in fiat value, or even depreciates in value slower than the dollar does?

[@MapleBlondieCr8s]

⁠@@matthewsokalski1969 - For some, nope, unfortunately some don't & won't ever own even a primary residence nor have any investments. So if this does affect you, consider yourself fortunate. ☮️

[@toddsonic]

Never ever for many.

[@matthewsokalski1969]

@@toddsonic which explains why many will continue to sink below the poverty line. It's not at all difficult to find money to put into something that holds value better than fiat; the difficulty is in finding the willpower to do so.

[@JAMGAR369]

The example you gave for 300K in capital gains has a small impact only about 4K more But say you sold a luxury cottage for 1.5 million that you bought 25 years ago for 200K, you would be very upset This is exactly what many doctors have done to save for their retirement and now the Liberals change the tax laws before they are ready to sell We already have a doctor shortage Experts are predicting this will cause more doctors to leave Canada and cause more of a shortage

[@matthewsokalski1969]

This will absolutely crush multigenerational family farms. The existing inheritance tax is already overwhelmingly punitive to the largely unprofitable industry.

[@Zilero]

Hmm, we don’t have an inheritance tax but they should also qualify for the LCGE or they could just roll it over to their kids to keep farming it. As far as I know you can just keep deferring any tax implications as long as you continue the farm.

[@matthewsokalski1969]

@@Zilero that's incorrect. Any transfer is a "deemed disposition", and triggers a taxable event. That deemed disposition IS an inheritance tax.

[@Zilero]

@@matthewsokalski1969 tomato, tomato, i suppose. technically not an inheritance tax, but if there’s no exemptions that apply to the deemed disposition i guess it’s effectively one. that’s interesting, how will it impact multigenerational family farms exactly? genuinely curious 👀

[@matthewsokalski1969]

@@Zilero I can tell you from personal experience, having been through this twice with my family in the last 6 years. I won't use our specific numbers, but rather numbers that are very representative of the situation any "average" Canadian farm would face today. The average farm in Canada comprises 5 quarter sections of owned land. The median age of farmers is 58 years old. Most of these farmers would have begun acquiring land in the late 80's to early 90's, so let's use 1990 and west central Ontario as a benchmark. Cultivated land at that time and place was selling for around $975/acre according to Farm Credit Canada. That would be about $156k per quarter section, or $936k for five quarters. FCC has that same land valued at $23,200/acre in 2021 (though in reality, any farmer in the area could only dream of the opportunity to buy land at that price today). That makes those same 5 quarters valued at just over $18.5M. When the farmer passes away, a deemed disposition occurs - the land is sold to the estate's beneficiaries for $0. But the market value is $18.5M, over $17.5M of which is capital gain. Farmers have a (now $1.25M) capital gains exemption. That leaves the beneficiary with a $16.25M capital gain. 67% of that is now taxable, or nearly $12M. That $12M is taxed the same as adding $12M to your income tax, and would incur a roughly $3M tax bill for that year. Of course, this doesn't include the capital gains on infrastructure and equipment, either. During the course of the lifetime of a machine shop, for example, the value depreciates year over year in regards to the cost of the owner to build it - as infrastructure ages, it is obviously worth less due to it's reduced lifespan. When the property is disposed of however, the magic of a few decades of inflation means that shop actually has a greater market value than when it was built. An 80' x 100' shop may have cost $20k to build in 1990, but now the same structure is worth $120k. The same is true with equipment. Just like a car, equipment depreciates in value immediately upon purchase, and continues each year thereafter for some decades. But upon disposition, the magic of inflation has now caused it to increase in value again, sometimes even beyond its original purchase price. Even if the machinery has played a minor role in the operation for a few decades, and been rendered effectively worthless to the producer due to its age, it still may have an appreciated market value. On top of all that of course, there may be personal capital gains to be factored in as well - investments, additional properties, etc. But at any rate, obviously nobody has the money available to pay the capital gains tax. The choices left available are to mortgage/remortgage some land to pay the bill (which is difficult, since the average farm isn't profitable enough to carry that burden), or sell a portion of it.

[@matthewsokalski1969]

​@@Zilero I apologize. For some reason, it would seem my reply to you never did post. The impact on multigenerational family farms is significant. I'll give you a glimpse into a situation that a family I'm close to has grappled with, so as to avoid "whataboutisms". This family recently lost their patriarch unexpectedly at a younger age, during a short 2-week gap in life insurance policies (due to having to switch to a different insurance provider). The farm carried significant debt, as is typical today. When the land for the farm was purchased by that patriarch, it cost around $40,000-$60,000 per quarter section, for the most part. Today, that same land carries a market value of up to around $1.25 million per quarter section. As the patriarch was not yet of an age to begin retiring from farming, the children were not able to draw an income from the farm (since the income was required for the patriarch's income, to service farm debt and provide a living). Since the children could not draw an income from the farm, they all require full-time off-farm jobs (which again, is quite typical today). With the patriarch's passing, there now arises some significant challenges. First, the children need to now carry a truly full-time (unpaid) on-farm job, as well as their full-time off-farm jobs, simply to keep the farm from bankruptcy. The alternative is selling much of the farm for to cover the expenses - the challenge of course being that selling large amounts of the farm incur large tax penalties, which in turn means even more of the farm must be sold. The other challenge is that of a deemed disposition. Since the land is now valued at an average of $1.2 million capital gain per quarter section, that means each quarter is treated as having been sold on the day of his death for $1.2M worth of personal income. This obviously results in much of the farm value being taxed at the highest income tax bracket. But of course, there IS no "free" money to pay that bill; all the money is tied up in the farm. On top of the unrealized land capital gains, rampant inflation has also caused the decades-old farm equipment to suddenly be valued at more than it's original purchase price - another unrealized capital gain. The end result is that approximately 25% of the farm has to be sold (or borrowed against, to an equivalent value) just to cover the tax on the deemed disposition. Either option obviously significantly hampers the ability of the farm to maintain financial solvency, as it either decreases potential income, or increases actual operating costs.

[@kimchan7189]

Get rid of Trudeau. The problem solved.