Lifetime Capital Gains Exemption:

A taxpayer may have a capital gain or loss when he or she sells or is considered to have sold capital property.

Also, depending on the taxpayer's particular situation, he or she may or may not have a capital gain (or loss) when he or she disposes of personal-use property or Canadian securities.

Under certain circumstances, small business owners, farmers, and fishers may be eligible for a lifetime capital gains exemption on the first $500,000 of capital gain realized on the disposition of qualifying capital property.

The 2007 Budget proposes that the LCGE be increased to $750,000. However, because the inclusion rate for capital gains and capital losses is 50%, the lifetime capital gains deduction limit would be increased from $250,000 (1/2 of $500,000) to $375,000 (1/2 of $750,000

The 2007 Budget proposes that the LCGE apply to dispositions of property made after March 18, 2007.

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