RE:RE:RE:RE:RE:RE:RE:RE:Federal Budget WednesdayAccountant here, with a small investment in weed and other mj stocks
Haven't seen it discussed yet. But I will discuss similar tax increases in capital gains tax from the past. Similar hikes in capital gains taxes both occurred in 1979 and 1994. Basically what happened in both instances is the government said the day before the tax increases what ever the capital gain was at that date you will pay tax on the growth from original purchase to the day before the increase at the old rate and from the date the tax increases forward you will pay tax on the growth at the new rate. Example below to explain better:
bought 1 share of weed at: $10.00 at some point in 2016
budget comes out says we will increase tax rate on cap gains on Jan 1, 2018
Say weed share value on Dec. 31, '17 is $20
then you sell your share on March 31. 2019 for say $50
then you file your 2019 tax return. You will have 2 capital gains to report.
first $10 ($20 dec 31, 2017 value - $10 Acb) for this gain you will use the old 50% exemption. Then you will have a $30 ($50-$20) capital gain to report where you will pay at the new tax rate.
So all in all you are in different as to whether you sell before the tax rate change or after because your old tax rate is locked in on your to date gains regardless of when you sell.
I have no confirmation if this will actaully be how they do the tax increase but I am just showing you how this has been done in the past. As if it is this way you should really be in different on when you sell. This is how they can prevent a market sell off to lock in gains.
This is is also the only way I can see them doing it and it be somewhat fair.