Selling Assets vs Selling Shares

Whether it's better to sell assets or sell shares depends on who's buying and who's selling.

Purchasers

  • prefer selling assets
  • can deduct the Capital Cost Allowance (CCA) or depreciation on buildings, machinery and equipment
  • when selling shares, the seller gets the deductions for the CCA

Sellers

  • prefer selling shares
  • get capital gains treatment (especially valuable if the Capital Gains Exemption remains
  • sale of assets can result in recapture of CCA

An asset sale is much more complex, which means extra costs for legal documents and tax planning

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