Richard CanfieldPodcast Host and IBC Advisor, Ascendant Financial · Authorized Infinite Banking Practitioner | Author of 4 Books

🔍 Purify Your Business #shorts

7 Jul 2023 · 1 min

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Richard Canfield walks through three tests Canadian business owners need to pass for the lifetime capital gains exemption. Too much cash or passive assets in your operating company can disqualify you. Purifying the business by moving excess cash out preserves the exemption.

Chapters

You've got to go through three very simplified tests. There's what's called an asset test, a basic asset test, and then a holding period test, just to kind of keep it really simple. If you have too much passive items in one instance, especially like cash, too much cash sitting in an operating company and you have plans in the future to sell that operating company, that can prevent the usage of or getting that capital gains exemption, you've got to. You'll hear this term called purify the business so that you can actually take advantage of this tax exemption rule that exists for Canadians who own a company.