Business TheReview Wednesday, December 19,1990 — A10

How fo avoid taxes from investments

Revenue Canada loves investors,
although the feeling is rarely reci-
procated.

To engender warmer emotions
as the season of good tidings
approaches, I asked Elio Luongo,
senior tax manager for Peat Mar-
wick Thorne, chartered account-
ants, t0 summarize some strategies
which can make investing less
taxing.

This list will alert you to tax tips
you should consider; you will
probably need further expert
advice on how these ideas apply to
your situation.

Capital gains and losses.

— Use up the regular capital
gains exemption of $100,000
before applying capital losses.
Ottawa could reduce or eliminate
this exemption at any time; the
original maximum has already
been reduced.

— You may make an election to
treat the proceeds of Canadian
securities as capital gains (and
losses), although there are some
Testrictions.

— Try to have profits classed as
capital gains rather than income
— on real estate investments, for
example. Be careful about flipping
your principal residence.

— Acquire investments person-
ally rather than through your com-
pany so you can use the capital
gains exemption.

— Claim a capital gains reserve
when you don’t receive all of the
sale price in one year.

— Transfer capital property into
a family company to trigger a
capital gain so you can use your
capital gains exemption and raise
the adjusted cost base of the asset.

— “Purify’ an incorporated
family business so you can sell its

shares to claim an additional ©Penses, borrow for investment. Are vou
- ; : Then the interest could be tax- » 5 =
Ae a ecole managing your Lee Ann Weigold
cation process.) — Invest in deposits of up to 12 money Or Financial Planning
CNIL — the cumulative net ™onths to mature in the new year, just managing
investment loss. to defer paying tax on the interest to get by? 384-8844

Your CNIL balance represents
the excess of your investment
losses over your investment
income since the beginning of

your access to the capital gains
exemption: you end up, in effect,
paying tax on your taxable capital
gain up to the CNIL amount.

— Buy shares with dividends
due to be paid before year-end.
Dividend income helps reduce
CNIL.

— Take dividends or interest
rather than salary from your incor-
porated family business.

AMT — the alternative mini-
mum tax.

When you transfer severance pay
(retiring allowance) to an RRSP,
make regular RRSP contributions,
claim tax shelter write-offs, realize
capital gains or receive dividends,
your income is adjusted for the
AMT calculation, and could result
in an AMT bill. :

— Increase salary: if your regu-
lar tax is higher than the AMT, you
pay no AMT.

— Defer receipt of capital gains.

— Divide retiring allowance
between two years (for example,
one payment before Dec. 31, 1990,
and the rest on Jan. 1, 1991).

Investments and tax shelters.

— Pay cash for personal

until April 30 of the following
year.

— If you bought a compounding
Canada Savings Bond, GIC or
other investment instrument by

‘Pay cash for personal expenses,
borrow for investment. Then the
interest could be tax-deductible’

SAY YOU SAW IT IN
THE REVIEW

Join us for

BOXING DAY

OPEN to 2 AM

Licence #

Dec. 31, 1989, declare the accrued
interest only every third year —
unless you will be in a higher tax
bracket in those years.

— Check the business merits of
tax shelters, not only the tax impli-
cations.

Around this time each year, you
should review the deadlines for
various payments so you can claim
a deduction or credit — or declare
an income item — for the current
year. Luongo listed the amounts
which must be paid by Dec. 31:

Charitable donations. Medical
expenses. Union and professional
dues. Investment and counsel fees.
Interest and other investment
expenses — including safe deposit
box rental. Alimony and mainte-
nance. Child care expenses.

Moving expenses. Political con-
tributions. Expenses for attendant
for disabled persons. Certain
deductible legal fees. Tuition fees.
Tax shelter investments. RRSP
administration fees paid outside to
your self-directed RRSP.

To be paid by Jan. 30, 1991: Any

interest owing to you for 1990 on

inter-family loans.

March 1, 1991: Deductible con-
tributions to your or your spouse’s
RRSP.

March 15 (June 15, Sept. 15,
Dec. 15), 1991: Quarterly tax
installments for 1991 if you pay
more than $1,000 federal tax and
less than 75 per cent of your
income has tax withheld at source.

Mike Grenby is a Vancouver-
based columnist and independent
personal financial adviser; he
will answer your questions as
space allows in his column —
write to him clo The Review, P.O.

Box 2070, Sidney, B.C. V8L 3C5.

Callme today tofindour #
bow Investors can help
you start building your

financial future.

CALE DIANE DOBBIN, B. Ed.

388-4234

Investors
Group

Building futures since 1940.
734 Broughton St.

Golf course hearing date
is now sef for January 10

A public hearing on the future

of the Brentwood Lakes golf

course, originally slated for Friday
night, will now be held on Jan. 10,
Central Saanich council decided,
Dec. 10:

Scheduled to start at 7:30 p.m.,
the hearing will now take place at
the Mt. Newton Middle School,
which can seat up to 570 people.

The original venue, the Central
Saanich Cultural Centre in Bren-

twood Bay, was considered too
small to accommodate the large
turnout expected by council.

Residents can comment on a
two bylaws that will rescind an
earlier council’s bylaw approving
of the golf course.

If approved, the two bylaws that
are the subject of the public hear-
ing will leave the Maber Flats land
zoned for agricultural use only.

STRAIGHT TALK | |
ABOUT
YOUR MONEY.

GURNEY SMITH &

a

|

ASSOCIATES LTD.

FINANCIAL CONSULTANTS ¢ LIFE UNDERWRITERS

SUITE 6 - 9843 2nd St., SIDNEY (In Marina Court) 656-2411
1205 C Verdier Ave, (Brentwood Bay Shopping Centre) 652-1482

9842 3Rd
SIDNEY, B.C.

CAPITAL CONSULTANTS LTD.

Personal - Corporate
INVESTMENT ADVISORS

~ FINANCIAL PLANNING PAYS 5

Wishing you
Happy Holidays

Prosperous New Year

or 655-4105 Res.

and a

Or visit your Revenue Canada Excise Office
_NEW YEAR’S EVE ee
Pp 747 Fort Street
Lots of Specials Sth Floor
& Door Prizes Victoria
Both Days! Or call

1 800 561-6990

Is your
business
ready for the

GST?

Your local Revenue Canada Excise Office
is here to provide information for
business and answer your questions

on the proposed GST.
Call

388-0500

Revenue Canada i
Customs and Excise

a

Revenu Canada
Douanes et Accise.

Canada