Capital Gains Exemption
The lifetime capital gains exemption on qualified properties was increased from $500,000 to $750,000 for dispositions on or after March 19, 2007. Taxpayers who had previously maxed out their $500,000 exemption will therefore have an additional $250,000 which they can use to offset capital gains on qualified properties for dispositions on or after March 19, 2007. The additional $250,000 will not apply to reserves carried forward from before March 19, 2007.
The increased exemption will apply to the taxpayer's total capital gains from the disposition of qualified small business corporation shares, qualified farm property and qualified fishing property.
