Commercial properties and capital gains and taxes?

[doggystyle99]

I am in the process of starting a new business venture and looking to purchase a commercial property. I have had many personal properties and have never had to worry about this as the properties are my primary residences. I will be asking my accountant about this later this week but do want to get some information before hand, if anyone knows anything about this?

So far as I understand about commercial properties is that if sold and made a profit from it would be considered capital gains. And capital gains are taxed only on 50% of the increased value in the property and at the personal tax rate of the person. If it is a commercial property that will be listed to the corporation what would the tax rate be based on?
Would it be based on the corporations tax rate or the CEO or principal owner of the corporations personal tax rate?

Also do they take the inflation index into account when calculating the capital gains amount of the property?
For example if I hold on to the property for 20 years and inflation is at 1% per year every year for the next 20 years do they increase the value of the property by 20% prior to calculating the capital gains amount?

Any information would be helpful.

 

[flying]

You might want to take a 2 day seminar by Benny and Belinda

https://www.youtube.com/watch?v=I2CJJ4_HhZQ

 

[nottyboi]

inflation is never considered in taxtion

 

[doggystyle99]

Thanks didn't think it would be but figured to ask.

So now the other question anyone know if the tax rate would be based on the corporations tax rate or the CEO or principal owner of the corporations personal tax rate if the property is listed to a corporation?

 

[newguy20]

If the property is bought and held by the corporation, the capital gains will be taxed at the corporate level.
If held personally, it will be taxed personally.

 

[Anynym]

Any information would be helpful.

CRA can be quite useful when it comes to questions of how rules apply to different scenarios. Many answers can be found online, and you can always call them and ask questions about how a given situation might be treated for tax purposes. Just remember that it's easy to overlook some important detail when outlining the scenario (often because you wouldn't have thought such details to be important): the advice they will give is no better than the information you provide to them.

 

[explorerzip]

Not quite sure why you would ask on the board and then go and speak with your accountant. Don't you trust their opinion? That's what you're paying them for.

 

[Vallant]

You will also have the benefits of depreciating the improvements on the land, ie building, mechanical, paving as well as the interest charges to finance the purchase where you cannot do with a principal residence. Also you don't know how it will be taxed when you eventually want to divest since the tax laws are constantly changing. Capital gains may be tax free or the whole gain may be taxed. I wouldn't worry about it.

 

[Anynym]

Not quite sure why you would ask on the board and then go and speak with your accountant. Don't you trust their opinion? That's what you're paying them for.

Never hurts to get a broad perspective before getting a more professional opinion: there are many aspects about which one can become better informed, making the time spent with the accountant much more worthwhile.