Here they go, screw us more.
Alternative Minimum Tax
Budget 2023 proposes to amend the Alternative Minimum Tax (AMT) applied to individuals. The AMT is a flat 15 percent tax based on a parallel calculation of an individual’s income (assuming a $40,000 exemption amount) that allows fewer deductions, exemptions, and tax credits than would otherwise be applicable under existing income tax rules. The AMT is applicable in instances where the 15 percent tax exceeds the tax calculated when all deductions, exemptions, and credits are allowed under existing income tax rules.
Budget 2023 proposes to broaden the application of the AMT by limiting tax preferences (i.e., exemptions, deductions, and credits) in the AMT calculation as follows:
The inclusion rate of capital gains will be increased from the current 80 percent to 100 percent. Capital losses and allowable business investment losses would apply at a 50 percent rate.
The inclusion rate for benefits associated with employee stock options will be changed to 100 percent.
The inclusion rate for capital gains resulting from the donation of publicly listed securities will be changed to 30 percent.
The 30 percent inclusion rate would also apply to the employee stock option benefit to the extent any deduction is available because underlying shares are also publicly listed securities that were donated.
Certain deductions and expenses will now be limited to 50 percent.
Only 50 percent of non-refundable credits (except a special foreign tax credit) will be allowed to reduce the AMT.
Budget 2023 proposes the following additional changes:
The AMT tax rate will increase from 15 percent to 20.5 percent.
The AMT exemption will increase from the current allowable deduction of $40,000 for individuals to an amount indexed to the fourth tax bracket, estimated to be $173,000 in 2024.
The AMT carryforward period will remain unchanged at seven years.
The proposed changes will come in to force for taxation years that begin after 2023.
Budget 2023 proposes to amend the rules introduced through Bill C-208 to ensure that they apply only where a genuine intergenerational business transfer takes place. The original framework of the legislation remains in place, applying to intergenerational share transfers of qualified small business corporation shares — or shares of a family farm or fishing corporation — from a parent to a corporation controlled by one or more adult child of the transferring parent.
Alternative Minimum Tax
Budget 2023 proposes to amend the Alternative Minimum Tax (AMT) applied to individuals. The AMT is a flat 15 percent tax based on a parallel calculation of an individual’s income (assuming a $40,000 exemption amount) that allows fewer deductions, exemptions, and tax credits than would otherwise be applicable under existing income tax rules. The AMT is applicable in instances where the 15 percent tax exceeds the tax calculated when all deductions, exemptions, and credits are allowed under existing income tax rules.
Budget 2023 proposes to broaden the application of the AMT by limiting tax preferences (i.e., exemptions, deductions, and credits) in the AMT calculation as follows:
The inclusion rate of capital gains will be increased from the current 80 percent to 100 percent. Capital losses and allowable business investment losses would apply at a 50 percent rate.
The inclusion rate for benefits associated with employee stock options will be changed to 100 percent.
The inclusion rate for capital gains resulting from the donation of publicly listed securities will be changed to 30 percent.
The 30 percent inclusion rate would also apply to the employee stock option benefit to the extent any deduction is available because underlying shares are also publicly listed securities that were donated.
Certain deductions and expenses will now be limited to 50 percent.
Only 50 percent of non-refundable credits (except a special foreign tax credit) will be allowed to reduce the AMT.
Budget 2023 proposes the following additional changes:
The AMT tax rate will increase from 15 percent to 20.5 percent.
The AMT exemption will increase from the current allowable deduction of $40,000 for individuals to an amount indexed to the fourth tax bracket, estimated to be $173,000 in 2024.
The AMT carryforward period will remain unchanged at seven years.
The proposed changes will come in to force for taxation years that begin after 2023.
Budget 2023 proposes to amend the rules introduced through Bill C-208 to ensure that they apply only where a genuine intergenerational business transfer takes place. The original framework of the legislation remains in place, applying to intergenerational share transfers of qualified small business corporation shares — or shares of a family farm or fishing corporation — from a parent to a corporation controlled by one or more adult child of the transferring parent.
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