B10 Terrace Review — Wednesday, February 13, 1991

Life insurance industry
ety nef

provides new sof

Despite its unparalleled
record of safety to date,
Canada’s life insurance in-
dustry has formed an or-
ganization to make absolutely
sure policyholders are pald in
case anything ever goes wrong
with one of ils companies.

I's the Canadian Life and
Health Compensation Cor-
poration (Compcorp), a volun-
tary association somewhat
similar to the compulsory
Canadian Deposit Insurance
Corp. which protects deposits

Rental unit

_ Have you ever thought about
creating a rental unit in your
home? Ifyou can pull it off, it's
_ certainly a way to help with the
mortgage payments ar other-
wise increase income.
’ First, of course, you need to
be sure a rental unlt is per-
mitted by your local zoning by-
‘Jaw. Ifnot ... well it was a nice
thought.

But if it's OK in theory. your
munietpal office will be able to
give you the guidelines about
minimum sizes, standards of
plumbing, wiring, fire safety
equipment and the like.

Then, assuming it's all sys-
tems “go” in principle, you'll
want to make sure it’s worth

the effort — that you really can
make a dollar, So look into the
initlal construction costs that
would be involved and operat-_

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in financial institutions.

Now, Compcorp says, if your
insurer ever goes out of busl-
ness, another Compcorp firm
would take over to honor your
coverage up to these ceilings:

* $200,000 in life insurance
protection: .

* $60,000 in cash withdrawal
for policies registered under
the Income Tax Act such as
RRSPs, RRIFs and pension
policies; _—

* $60,000 in cash withdrawal
for non-registered policies, in-

helps pay

ing expenses such as utililles,
insurance and routine repairs
and maintenance.

Construction costs can run to
several thousand dollars and
you'll want to consuit a tax ac-
countant as to the tax deduc-
tions available to help. In addi-
tion, when you sell the proper-
ty, remember only the prin-
cipal residence portion of your
home will be exempt from capi-
tal gains tax.

The alterations needed to cre-
ate a rental unit may involve a
new entrance, kitchen or
bathroom, as well as altera-
fons to the rest of the house.
Try sketching various plans on
paper to see what works.

Your ideas should eventually
become the specifications
needed to get quotes from con-
tractors and obtain a building

cluding life insurance cash ©

values;

* Income of $2,000 a month

from annuities, registered or
not. -
By law, insurance companies
have always been required to
maintain reserves to guarantee
their policies. Now Comcorp
adds further protection.

If you'd like more information
write Comcorp at 20 Queen
Street West, Suite 2500,
Toronto, Ontario M5H 3R3. Or
call 1-800-268-8099.

permit.

If the changes involved are
minor, you may be able to draw
up plans yourself. Otherwise,
it's best to have a professional
architect, interior designer or
contractor do it for you.

Wheni you do get to the con-
struction silage, you'll be wise
to get quotes from three con-
tractors and references from
previous clients. When you
choose, insist on a firm con-
tract to specify when -the job
begins and ends.

it all adds up to a major un-
dertaking, but ifyou doall your
homework properly and the
figures make sense, a new

rental unit will certainly be a

secure long-term investment
and bring in a good rate of

relurn over time. Good luck! -
_ Royal LePage)

til 9

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ATAT Lakelse Ave,
: Terrace

: oe = phone 635-6231.

By ANNE STARRET, C.A.

It sounds as if it couldn't be
simpler: any expenses in-
curred in the year for the pur-
pose of earning self-employed
income are tax deductions, un-
less specifically stated other-
wise. os

But pulling teeth Is often -

easier than prying.a deduction
loose from Revenue Canada.
However, recent changes in the

tax rules could work well to the
advantage of the self em-.

ployed. a
One positive change is the
easing of restrictions on aulo-
mobile expenses previously
imposed on us. Now the ceiling
price for a car on which capital
cost allowance can be claimed

has increased from $20,000 to

$24,000. A small mercy. At the
same time, allowable leasing
costs have been increased from
$600 to $650 a month, and the
allowable interest deduction
raised from $250 to $300 a
month. Again very welcome.
And for the person who's ex-
pensing mileage rather than
claiming other expenses,

there's some welcome news. -

The allowable per-kilometre
expenses has been increased

‘Self employed have
special tax deductions

to 31 cents for the first 5,000
km, and 25 cents thereafter —
up from 27 and 21 cents
respectively.

Unchanged is the fact that
the person claiming car expen-
ses must still be able to prove
the business-use portion of the
expense to the satisfaction of

Revenue Canada. So keep that
og. .

In cases where a self em-
ployed person runs a business
strictly from home, then the
office and related expenses can
still be claimed in the appro-
priate proportion. However, if

the individual has an office in
the home as well as at the place
of business, the home office is
no longer deductible.

As far as commissioned sales-
people go, business expenses

‘-can be claimed only against

commission income, nothing
else.

Where depreciable assets,
such as building or equipment,
have been acquired, the capital
cost allowance can only be
claimed from the date it was
first used to generate income.
If it was not put into use, then
no CCA can be claimed for the

| Barrie F Gieselman -

first two years.
~]

CHARTERED ACCOUNTANT
Specializes in:

| @ Accouriting :

- .--@ Income Tax Consulting . Sy.

@ Management Consulting

Telephone: 635-7202

302 - 4546 Park Avenue
Terrace, B.C., V8G 1V4

Doan

‘

—

1st |

Look to these people for:

- The Ultimate

RRSP

4546 Lakelse Avenue,
Terrace, B.C. V8G 1P8
Phone 635-6166

Great-West Life
ASSUAANEE Caan conn: —_

Jim Lynch