ae 4 we hy ~ViF ee a rene ee ee = ho B ta ye Ke Pe oo Seaneeeeaees Business More taxation questions than ever. Are you confused about report- ing capital gains, applying for the proposed GST credit, claiming medical expenses, dealing with the WCB T4A slip you received or collecting the B.C. renter’s credit? Join the club. People are asking more questions about these topics than anything else, according to David Morgan, public affairs offi- cer for Revenue Canada. CAPITAL GAINS “People think they don’t have to declare capital gains if they have not used up their $100,000 capital gains exemption,’ Morgan said. “But even if you don’t have to pay any tax on your capital gains, you must still declare all capital gains and losses each year, as well as complete the CNIL (cumulative net investment losses) record.” Unfortunately, the two required forms — 7657 and 1936 — don’t always come automatically with your T1 retum. So if you had any capital gains or losses last year, get the Capital Gains Tax Guide (which includes those forms) from the tax office. “People also confuse capital gains and taxable capital gains,” Morgan said. If you sell stocks or revenue property, for example, and make a $60,000 profit, you have a $60,000 capital gain. However, in 1989, you report only two-thirds — or $40,000 as a taxable capital gain. (this year, you report three-quarters — $45,000 in our example — as a taxable capital gain.) You can then offset your taxable capital gain with a deduction. Your claim is based on two-thirds for 1989 and three-quarters for 1990 of what remains of your $100,00 capital gains exemption. THE PROPOSED GST CREDIT “Some people are intimidated by the form, some overlook the form — it’s in front of the package of schedules — and some don’t think they qualify,” Morgan said. Even though the Goods and Services Tax is not yet law, Reve- nue Canada has included with every T1 return for 1989 a green form, The Proposed Goods and Services Tax Credit. If the GST becomes law, you could then be eligible to receive a cheque for a GST credit payment next December. Quite a few people will qualify. So check the details about maxi- mum net income and “qualify- ing” children on the form (see the top of page 2 first). Then either complete and send in the form with your tax return or if you’d Tather, wait until the law is passed and then send in the form. “Tf you do send it in later, do NOT mark your letter intercept,” Morgan said. “The GST credit form is handled separately from the processing of your tax return.” MEDICAL EXPENSES Many people ask if they, can claim three per cent of their net income as a medical expense if they have the supporting receipts “or they are not sure what their is the rule: If three per cent of your net income (the amount on line 236) is $1,517 or more, subtract $1,517 from the total of your medical expenses. Claim the balance. If three per cent of your net income is less than $1,517, then subtract that figure (the three per cent of your net income) from the medical expense total. Claim the balance. For a list of qualifying medical expenses, get two forms from your local tax office: IT-509 Medical Expenses Oct. 9, 1987, and IT-509 Special Release March 23, 1989. 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