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How do you not owe any tax on $14,000 income? Is that some Canadian benefit?
by nodesocket 8y ago
How do you not owe any tax on $14,000 income? Is that some Canadian benefit?
- desdiv 8y agoWhen a Canadian has $14,000 in capital gains, their tax liability is calculated as: $14,000 * 50% * marginal tax rate. The 50% is basically the Canadian way of taxing capital gains lower than earned income. What GP was trying to convey, albeit in a slightly confusing fashion, was this: 1. He had $14,000 in capital gains 2. No tax was directly accessed against this $14,000 amount, in other word: "tax bill was ~0 on the $14K". 3. The taxable portion of his capital gains was $14,000 * 50% = $7000 4. He paid his marginal tax rate on the taxable portion of his capital gains ($7000)
- exithrowaway564 8y agoSorry, yeah, could have been a lot more clear there. I was making extremely little salary at the time of the secondary, so I paid something like 20% tax on half, for about $1400 in taxes on $14k proceeds.