Q: I've owned TD for over 30 years and am sitting on a large unrealized capital gain. I know this is a great "problem" to have but I resent paying up to 33% tax on any sale now that the feds have upped the tax inclusion rate to 2/3 from 1/2. I took all the risk but lose close to 1/3 of the reward.
Can you suggest any way to mitigate/reduce any tax hit if I were to dump my TD shares?
I hate to say it but I suspect that this issue will only increase (i.e. next step will be 75% inclusion) as the feds look to gouge people to cover their horrific fiscal ineptitude.
Can you suggest any way to mitigate/reduce any tax hit if I were to dump my TD shares?
I hate to say it but I suspect that this issue will only increase (i.e. next step will be 75% inclusion) as the feds look to gouge people to cover their horrific fiscal ineptitude.
5i Research Answer:
There is really no way to reduce tax in such a scenario unless there are offsetting capital losses elsewhere. One option though is an investor could sell a position over multiple years to get the 50% inclusion rate on the first $250,000 in gains, assuming it is available. In other words, an investor could crystallize $250,000 in gains now, and $250,000 in January, and the inclusion rate would only be 50% in each taxation year, assuming no other gains were taken.