Capital Gains Break Even

This calculator compares selling an investment before June 25, 2024 at the 50% inclusion rate to holding the investment until a future date and selling when the inclusion rate is 66.67%. It estimates your break-even holding period when the after-tax value of your portfolio will be the same whether you sell before June 25 or maintain your portfolio and sell in the future, assuming all else remains the same.

Where do you live? Ontario
Top marginal tax rate
53.53%
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Top Marginal Tax Rate
This the top marginal tax rate on interest/employment income in your province.
Investment Details
Fair Market Value (maximum value $10M)
A
500,000
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Fair Market Value
The fair market value of the asset or investment you are selling or disposing of through a deemed disposition.
Adjusted cost base (maximum value $10M)
B
200,000
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Adjusted Cost Base
The adjusted cost base is usually the original cost of the asset or investment plus any expenses to acquire it, such as commissions and legal fees.
Sell Now at 50% Inclusion Rate and Reinvest Proceeds
Capital gain
A - B
$300,000
Taxable gain (50% of capital gain)
$150,000
Tax at 53.53%
C
$80,295
Amount to reinvest
A - C
$419,705
Hold and sell at a later date at 66.67% inclusion rate
Amount to invest
$500,000
Include lower inclusion rate in "sell at later date" option?
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Include Lower Rate?
Yes means the 50% inclusion rate on the first $250,000 of capital gains is factored into the "sell at later date" calculations. No means the 66.67% inclusion rate is used on all capital gains.
Rate of return (maximum value 16%)
5.00%
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Rate of Return
The rate of return is 100% deferred capital gains with no interest or dividends.
Results

If you sell $500,000 before June 25, you will pay tax of $80,295 on the capital gain, leaving $419,705 after-tax proceeds to reinvest. Alternatively, you could keep the full $500,000 invested and sell at a future date.

In this scenario, your estimated break-even year is 9.

If you plan to hold the security for less than 9 years, you may be better off to sell now at the 50% inclusion rate.

If you plan to hold the security for more than 9 years, you may be better off holding the investment and not selling now.

Expand Table
This table shows the difference in after-tax value between selling now at the 50% inclusion rate and holding/selling the security at a later date at the 66.67% inclusion rate.
Year Sell Now at 50% Inclusion Rate Sell Later at 66.67% Inclusion Rate Difference
Future
Value		Tax on
Gain		After-tax
Value		Future
Value		Tax-on
Gain		After-tax
Value
0$419,705$0$0$500,000$0$0$0
1$440,690$7,489$433,201$525,000$115,982$409,018$24,183
2$462,725$15,352$447,372$551,250$125,349$425,901$21,472
3$485,861$23,609$462,252$578,813$135,186$443,627$18,625
4$510,154$32,278$477,876$607,753$145,513$462,240$15,636
5$535,662$41,381$494,281$638,141$156,358$481,783$12,498
6$562,445$50,939$511,506$670,048$167,744$502,303$9,202
7$590,567$60,975$529,592$703,550$179,700$523,850$5,742
8$620,095$71,513$548,583$738,728$192,254$546,474$2,109
9$651,100$82,577$568,523$775,664$205,435$570,229$-1,706
10$683,655$94,195$589,460$814,447$219,276$595,172$-5,711
11$717,838$106,394$611,444$855,170$233,808$621,361$-9,917
12$753,730$119,202$634,528$897,928$249,067$648,861$-14,333
13$791,416$132,651$658,765$942,825$265,089$677,735$-18,970
14$830,987$146,773$684,214$989,966$281,912$708,053$-23,839
15$872,537$161,600$710,936$1,039,464$299,577$739,887$-28,951
16$916,163$177,169$738,994$1,091,437$318,124$773,313$-34,319
17$961,972$193,517$768,455$1,146,009$337,599$808,410$-39,955
18$1,010,070$210,682$799,388$1,203,310$358,048$845,262$-45,873
19$1,060,574$228,705$831,869$1,263,475$379,519$883,956$-52,087
20$1,113,602$247,629$865,973$1,326,649$402,063$924,585$-58,612
21$1,169,282$267,499$901,783$1,392,981$425,735$967,246$-65,463
22$1,227,747$288,363$939,383$1,462,630$450,591$1,012,040$-72,656
23$1,289,134$310,270$978,864$1,535,762$476,689$1,059,073$-80,209
24$1,353,591$333,273$1,020,318$1,612,550$504,092$1,108,458$-88,140
25$1,421,270$357,425$1,063,845$1,693,177$532,865$1,160,312$-96,467
26$1,492,334$382,785$1,109,548$1,777,836$563,077$1,214,759$-105,211
27$1,566,950$409,414$1,157,537$1,866,728$594,800$1,271,928$-114,392
28$1,645,298$437,373$1,207,925$1,960,065$628,108$1,331,956$-124,032
29$1,727,563$466,731$1,260,832$2,058,068$663,082$1,394,985$-134,153
30$1,813,941$497,556$1,316,385$2,160,971$699,805$1,461,166$-144,781

 
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Assumptions
All calculations use your province's top marginal tax rate in 2024. Returns are 100% deferred capital gains with no interest or dividends component. The new inclusion rate rules have not yet been passed into law. This calculator shows results for a maximum of 30 years.

Note
You should consult with your tax advisor to assess how this new budget proposal might affect you, your trust, and your corporations. There are tax and non-tax factors to consider so a comprehensive cost-benefit analysis is advisable.

Disclaimer
This calculator is for educational purposes only. All charts and illustrations are for illustrative purposes only and are not intended to illustrate the performance of any security or portfolio. You should not rely on the results as an indication of your financial needs and we recommend that you seek your own financial, investment, tax, legal or accounting advice nor shall the information herein be considered as investment advice or as a recommendation to enter into any transaction. Professional advice should be obtained prior to acting on the basis of this information. The deduction of advisory fees, brokerage or other commissions and any other expenses that would have been paid may not be reflected in the calculation results.©Copyright 2024 Ativa Interactive Corp. All rights reserved. Powered by Ativa.com.