In a prior
Client Alert, we summarized tax proposals
released on July 18th, 2017 that will, if enacted as proposed,
significantly change the tax rules for private corporations and
their shareholders. In some cases, it may be appropriate (or
at least not unwise) to wait to see the final form of proposals
before taking action. However, there are two scenarios we
would like to draw to your attention where you should consider
acting now.
First, under the proposals, access to the lifetime capital gains
exemption (LCGE) is to be considerably restricted starting next
year. However, under the proposals, a transitional rule would
allow certain affected individuals to elect to realize, on a day in
2018, a capital gain in respect of eligible property by way of a
deemed disposition for proceeds up to the fair market value of the
property (resulting in an increase in cost basis of the property,
thereby reducing taxable capital gains on a later sale) and to use
their LCGE with
