What is it?
A capital gain is a gain realized on the disposition of capital property for tax purposes. Capital gains benefit from a one-half inclusion rate. For example, for a $100 capital gain, only $50 is included as taxable income.
Because the disparity between dividend tax rates and the lower capital gains tax rates has increased over the years, the government is concerned that business owners have an emphasis on extracting funds that would otherwise be taxed as dividends as capital gains.