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muy Scugog Citizen -- Tuesday, February 21, 1995 -- 15 +" > Tax Tips Last chance for capital gains benefits Any stocks or shares hanging around? Maybe from your Companies stock option plan, or dear old Granny left you some in her will. How about personal treasures like stamp or coin collections, art or even jewellery. Those beautiful vintagé cars | Don't miss out on tax deductions by Randy Keller Here are some tips on some income tax deductions and credits which are available to individual taxpayers and how to maximize them: Spousal RRSP rollover: - You can contribute up to $6,000 of periodic payments received from a registered pension plan (again, Canada Pension Plan and Old Age Security do not qualify) or deferred profit sharing plan into spousal Registered Retirement Savings Plan. This special rollover is not available after the 1994 taxation year. Carrying charges: - Don't forget to deduct safety deposit box charges, RRSP administration fees, investment counsel fees, interest on funds borrowed to earn income, and other expenses paid to manage or safeguard your investment assets. Equivalent to married credit: . You may be able to claim this if you supported a minor relative at any time in the year. Pension Income Credit: - Many seniors and others receiving "eligible pension" (Canada Pension Plan and Old Age Security do_not qualify) will be able to claim a pension income credit of up to $1,000. Education amount and tuition . fees: - Students who do not need + to claim all of these amounts may be able to transfer them to their spouse or to their or their spouse's parent or grandparent. Medical expenses: - Medical expenses can be claimed for yourself, your spouse, and your dependent children and grandchildren. Since the credit is reduced by 3 per cent of net CIBC its hours just for you. We see what you see: 145 QUEEN STREET, PORT PERRY 965-4444 income, the best strategy here is to claim them all on the return of the lower-income spouse. Charitable donations: - Either spouse can claim charitable donations on behalf of the other spouse, and since a tax credit for charitable donations is allowed at a federal rate of 17 per cent for the first $200 and 29 per cent for donations over $200, it makes sense to claim them all on one return. Tax credits may be worth slightly more to the higher- income spouse, since an additional surtax applies to individuals with high "basic federal tax". Goods and services tax rebate: - If you incur éxpenses that are deductible from employment or self-employment income, and those expenses include GST, you may be able to recover the GST in the form of a rebate on your personal tax return. Child Tax Benefit: - Both spouses must file an income tax return to be eligible to receive this payment, which is based on family income and the number of eligible children. od (Randy Keller is a partner in the Port Perry firm of VanCamp & Keller, Chartered Accountants) / PENNY & ASSOC. § ACCOUNTING SERVICES Betty Penny, Principal Accountant Ernest Basford, Associate 180 MARY ST,, PORT PERRY ONTARIO LSL1C4 Phone (905) 985-0712 Fax : 985-9461 "It's WLETR (IVR FIiR It's What You Keep' W Accounting and Tax Return Preparation for Farms, Small Businesses and Soporstions. 8 'E-Filing' at No Extra Charge, BM New Business Planning and Start-up '® Financial and Estate Planning MW Personal, Confidential Service MW Experienced, Courteous Staff FREE INITIAL CONSULTATION Evening and Weekend Appointments Available. 250 QUEEN STREET, PORT PERRY (Next 10 the Big V) (905) 985-9791 Fax (905) 9854103 see cruising around Port Perry. Then there's the cottage or maybe that piece of land you bought a while back that you plan to build your retirement home on. Then this article is important to you. Unless you make the correct decision, you could end up paying thousands of dollars in unnecessary taxes in future years. As of February, 1994 the $100,000.00 lifetime Capital Gains Deducfion has been eliminated. That means, any increase in value of Stocks Shares, Real Estate, Personal Capital Property or Rental Property is now subject to tax at he time it is sold. However, Revenue Canada has not cut us off cold, they have given us the opportunity to take advantage of the Capital Gains Deduction for one last time by filing what they refer to as an 'Election' with your 1994 tax return. If the 'Election' is not made with the '94 tax return it will mean that in future years, at the time the property is sold, or the owner dies, the full increase in value from the time of purchase is taxable. For instance, if you bought some shares in 1975 for $100.00 & they are worth $1000.00 in 1994, you have a gain of $900.00. Suppose you sold them in 1998 for $1200.00 & had not taken advantage of the 'Election', you would have to pay tax on the total capital gains of $1100.00 ($1200.00-$100.00). However, if the 'Election' was © Computer Training ® Accounting © Tax Service ® Temporary Accounting Staff © New Business Setups ® Servicing Durham Region \[o] made with your '94 tax return, the first $900.00 would be covered by the Capital Gains Deduction & tax in 1998 would only have to be paid on the extra $200.00. Taking advantage of the 'Election' however could in certain circumstances increase your tax liability for 1994. For instance, if your property is Real Estate, a portion of the gain that pertains to two years out of the GST cheques & Family Benefits, and the reduction of the age amount. If investment losses in the past outweigh investment income, then the total capital gains will not be covered. Also, if the deduction is over $40,000.00, this could trigger the Alternate Minimum Tax. However any additional tax paid due to AMT can be recouped in future years. So take your financial future into your own hands. Research your options and see if it is to your advantage to claim the Capital Gains Deduction for the last time. If you have any concerns pertaining to this or other tax matters,please feel free to contact Kathleen White, H&R Block 985-9803. total number of years owned is not covered by the deduction (the deduction was removed from real estate in Feb. 1992) so is therefore taxable. Also in claiming the capital gains for 1994, this could trigger claw-back of Old Age Pension or U.L, reduce/eliminate G.L.S. or Ontario tax credit as well as PROVINCIAL BOND OFFERINGS Bond Annual Yield Maturity Date Ontario Hydro ~~ 8.86%" Mor 31, 1998 Ontario Hydro ~~ 9.28%" June 24, 2002 Ontario 9.37%" Sept 15, 2004 * All rates are based on yields to matty. as of February 20th, 1995 and are subject fo change and market avalicbiity. Semi-annual interest; high quality bonds; instantly marketable Compare Bonds vs. GICs and Mutual Funds Establish a Self-Directed RRSP Office at Bank of Montreal, Port Perry call Christopher K. Thomas, Investment Advisor (905) 985-3636 ) NESBITT BURNS KNOWLEDGE is POWER OWN A COTTAGE? If you own a cottage, rental property, land, stocks, mutual funds, or other types of capital property, you may be affected by the elimination of the $100,000. Capital Gains Exemption. By filing a special lection with your 1994 tax return, you can elect to recognize those gains that have occurred, and claim an offsetting capital gains exemption so that you are not taxed. You do not have to sell your property. At H&R Block, we understand this important change. Come see us for an evaluation of your personal tax situation. (As iii A ye HaR BLOCK You can trust H&R Block. 174 Perry St., Port Perry 985-9803