Analyze the tax impact of transferring personal assets (stocks, real property, business assets) to your corporation under Section 85. Compare keeping assets personally vs inside your CCPC.
If you sold this asset at its current FMV — personally vs through the corporation:
Section 85 of the Income Tax Act allows a Canadian taxpayer to transfer eligible property to a taxable Canadian corporation on a tax-deferred basis. Instead of triggering a capital gain at the time of transfer, you "roll" the asset into the corporation at an elected amount (usually your cost base), deferring the tax until the corporation eventually sells the property.
The elected amount is the deemed proceeds of disposition for the transferor and the cost to the corporation. It must fall within a valid range:
Boot is non-share consideration received in the transfer — typically a promissory note from the corporation. Boot lets you extract value tax-free up to your cost base. If boot exceeds ACB, the floor is lifted and a capital gain is triggered.
Both the transferor and the corporation must file Form T2057 (Election on Disposition of Property by a Taxpayer to a Taxable Canadian Corporation) by the earlier of either party's tax return filing deadline for the year the transfer occurs. Late-filed elections are subject to penalties.
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This is one of the most powerful tax planning tools available — but execution matters. We prepare the Form T2057, calculate optimal elected amounts, and ensure your rollover achieves maximum deferral.
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