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A Brief Note On The Canadian Tax Law

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Under Canadian Tax Law, there is an election for companies to defer recaptures and capital gains of property that was involuntarily or voluntarily disposed of. In this research paper, we attempt to prove that the election is a useful taxation strategy for businesses so that they are not subject to pay taxes on capital gains or recaptures until such a time where they may acquire an eligible replacement property that will help them earn business income. We will provide facts, definitions, and examples to illustrate the use of this election throughout the paper by explaining the capital cost allowance system, the offset available to business for capital gains and recaptures, the election process, the rules regarding replacing former business …show more content…

A voluntary disposition is when the taxpayer has deliberately disposed of a capital asset by means of sale or other form of disposition, in which the taxpayer receives consideration for the disposal. An involuntary disposal, on the other hand, is where property is stolen, destroyed by fire or

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