Selling Your Business 2025 — How To Value, Structure, And Close Tax-efficiently With Mackisen Cpa Auditors Montreal

Selling your business is the largest financial transaction of your life. In 2025, CRA’s heightened audit review on share valuations, the new capital gains inclusion rate, and Bill C-208’s intergenerational transfer changes make professional tax planning essential. Without proper structure, sellers risk double taxation, loss of the Lifetime Capital Gains Exemption (LCGE), and overvaluation or undervaluation disputes with CRA. Mackisen CPA Auditors Montreal specializes in end-to-end business sale planning—from valuation to closing—to protect your wealth, minimize tax, and ensure a clean transition to buyers or family successors.

Legal and Regulatory Framework

Income Tax Act (Canada) Section 110.6(2.1): Provides the LCGE of $1,016,836 on qualified small business corporation (QSBC) shares. Section 84.1(1): Prevents converting dividends into capital gains on related-party transactions; Mackisen structures Bill C-208-compliant family transfers to retain LCGE eligibility. Section 55(2): Anti-avoidance rule governing intercorporate dividends to prevent surplus stripping. Section 20(1)(a): Allows deductions for sale-related professional fees including legal, accounting, and appraisal costs. Section 69(1): Ensures fair market value (FMV) on non-arm’s-length transfers; Mackisen provides certified valuations to defend sale prices under CRA review. Section 70(5): Deems all assets sold at FMV upon death—critical when aligning sale and estate planning. The Quebec Taxation Act mirrors these provisions, requiring dual compliance for both CRA and Revenu Québec filings.

Key Court Decisions

McClurg v. Canada (1990): Confirmed that share reorganizations for legitimate business or family succession purposes are valid. Grosso v. The Queen (2014): Reinforced that failing the QSBC active asset test can forfeit LCGE eligibility. Poulin v. The Queen (2016): Recognized trust-held shares for LCGE if documentation and valuations meet CRA standards. Kieboom v. The Queen (1992): Approved family share transfers where value and purpose were bona fide. These cases define how Mackisen builds compliant structures that withstand CRA audits.

Why CRA Targets Business Sales

CRA audits high-value share sales to verify valuation accuracy and tax compliance. Common triggers include reported sale prices below market, intergenerational transfers without Bill C-208 compliance, and LCGE claims lacking 24-month ownership or QSBC verification. CRA now uses artificial intelligence to benchmark declared sale values against industry multiples and financial databases. Any deviation prompts a reassessment. Mackisen CPA Auditors mitigates these risks by preparing certified valuation reports and legal documentation before the transaction closes, ensuring CRA cannot dispute your sale price or exemption claim.

Mackisen’s Strategy

1. Pre-Sale Valuation — Determine accurate FMV using income, asset, and market approaches supported by independent CBV appraisal.

2. Corporate Purification — Remove passive assets or investments that threaten QSBC status before sale.

3. LCGE Structuring — Qualify each shareholder for the $1,016,836 exemption, multiplying tax-free gains across family members.

4. Share Reorganization — Implement estate freezes or rollovers under Sections 51 and 85 to align control and optimize taxation.

5. Negotiation Support — Prepare audited financial statements, adjusted EBITDA, and deal metrics that increase buyer confidence and justify premium pricing.

6. CRA Audit Protection — File compliant valuations, legal agreements, and supporting evidence that validate the transaction under the Income Tax Act.

7. Post-Sale Wealth Planning — Reinvest proceeds through IPPs, holding companies, or estate trusts to manage retirement income and reduce future tax. Mackisen handles the full process, coordinating accountants, lawyers, and financial advisors to guarantee seamless execution.

Real Client Experience

A Montreal manufacturing owner sold a $7.2 million company to new investors. Mackisen purified the corporation, ensured QSBC qualification, and implemented LCGE for three shareholders, saving $1.5 million in taxes. A Quebec tech founder sold shares to his children’s corporation under Bill C-208. Mackisen prepared valuation and compliance reports, allowing the family to transfer ownership and claim the full exemption without triggering Section 84.1 penalties.

Common Questions

What taxes apply when I sell my business? Fifty percent of capital gains are taxable unless covered by LCGE. Can I sell to my child’s corporation? Yes, under Bill C-208 if the transfer meets CRA’s active management and share retention requirements. Do I need a professional valuation? Absolutely—CRA can deny exemptions or reassess FMV without independent valuation evidence. Can I pay myself dividends instead of selling? Possibly, but Section 84.1 may reclassify them as taxable if not properly structured.

Why Mackisen

Mackisen CPA Auditors Montreal are Canada’s leaders in business sale planning, valuation, and CRA audit defense. Our integrated CPAs, CBVs, and tax lawyers design transactions that comply with federal and Quebec laws, ensuring LCGE maximization and FMV compliance. We manage pre-sale planning, negotiations, documentation, and CRA defense so you sell with confidence and keep what you’ve earned. Call Mackisen CPA Auditors Montreal today for your 2025 Business Sale and Valuation Consultation. The first meeting is free and designed to protect your wealth, minimize tax, and close your deal successfully.