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I .--.y R ads xX £eer A \1auAsl yebeoul - AAT YARIS TAOS - dE --- ww ee wee we ees eee ee = - --e- - - - = --- Re - re - - T_T ----------. ---- ----_----. wy -- Tr at ~~. - PORT PERRY STAR - Tuesday, January 26, 1993 - 15 "eNO 19 1gaRGaw OV YAR) © NY TI --------- Tw a. Ew we wwe ew "A Family Tradition for 126 Years" ACO) LJ 0 eave) OS OO 0 Pe OCOO SICH XX ICH (A oe', SRM u x Sed See esens ves ¥e'e x ® 9 Se¥e% 0 OO . oe Sourav ste' OCR 0 RUN [ZRROQOOQERY/ A RNA EAN \V/ SOONER) OOO EIN SSO . wsesesetelel vee OOOO \ seer QO [| OSM Tax ation and your investmen o. egy for the sake of a tax benefit After use of the $100,000 life- lar of loss. This implies that a notapplyin this situation. for those who will otherwise pay egy of a ne time capital hed exemption, capital loss may bo better ap- Tax Gain Selling tax on capital gains realized in and your tax advisor should be | three-quarters of capital gains plied against a capital gainina A rule similar to the superfi- 1992 or have paid tax on gains consulted before you undertake | are subject to tax in the year yearafter 1989. cial loss provision does not ap- realized in 1989, 1990 and 1991.. - gain/loss gelling, io ; | that a gain is realized. This re- ply on realization of a capital There are a number of tax con- pit : | sults in a tax on capital gains of Superficial Loss gain. For those who have capi- siderations which must be re- courtesy of approximately 36 per cent in The superficial loss rule will tal gain exemption and want to viewed before use of this strate- 'Bob Gow, the highest marginal tax brack- result in the denial of a loss for realize gains in 1992, this can gy however. As always, don't Richardson Greenshields, et. For investors who have real- tax purposes if an identical se- be done without concern for overlook yout investment strat- Oshawa ized gains in 1992 and who also have investments which if sold would result in a capital loss, there may be an opportunity to reduce tax in this year and re- cover tax from prior years. Tax Loss Selling Tax loss selling will be useful only for those who have fully used their capital gains exemp- tion. Since a capital gain real- ized by an investor who still has capital gain exemption will not result in any tax payable, a cap- ital loss will not produce any ec- onomic advantage. Those who have used their capital gains ex- emption however, can realize a capital loss in 1992 and use any part of the loss to offset capital gains in 1992, in the three prior years or choose to carry it for- ward to a later year. All purchases of a security made over a period of time will have a cost base determined on a weighted-average basis. For example, 200 shares bought at $3 and 400 shares at $6 will have an average cost of $5 (200 shares at $3 or $600 plus 400 shares at $6 or $2,400 for a total .0f 600 shares and $3,000). Capital gains realized in 1989, 1990 and 1991 can be off- set by a capital loss realized in 1992. Note that this applies to capital gains on which tax has been paid - you cannot replen- ish your capital gains exemp- tion with aloss carry back. Another point to keepin mind is that the per cent of capital gains included in income in 1989 was two-thirds, not the three-quarters that it is now. This means that a carry back to 1989 will recover tax at a rate of about 31 per cent whereas ap- plication of a loss in 1990 or a later year would result in tax saved of about 36 cents per dol- curity is repurchased within 30 days before or after the sale. The amount of the loss will be added to the cost base of the se- curity. This rule also holds for the account of your spouse or a corporation that you control. There are two other situa- tions to watch for. If you sell shares to a corporation con- trolled by either you or your spouse, the shares will be trans- ferred at your cost and the loss will be denied. Also, a loss real- ized on transfer of securities to your or your spouse's RSP or RIF is denied. In this situation, sell the security for a loss, con- tribute the proceeds to the RSP or RIF and, if you wish to con- tinue to hold the security, re- purchase it in the RSP or RIF. The superficial loss rule does waiting 30 days before repur- chase of the security. Cumulative Net Investment Loss The cumulative net invest- ment loss provisign will restrict use of your capital gain exemp- tion if interest you have paid on money borrowed for investment purposes is greater than your grossed-up dividend and inter- est income when added to your CNIL position carried forward from last year. This may result = in some part of ypur capital - gains realized in 1992 not being ~ offset by your capital gains ex- emption. Access to your capital gain exemption will be deferred until your CNIL balance is re- duced to zero. Summary Tax loss selling may be useful ~RRSP's Examine your options ¢" ROBERT J. GOW 434-6161 or 1-800-267-1522 foi : 5 I ey HARA ay N © RE 2 ao HEL MOLTO AERA ovement advisor to Candie enterprin nd ntrpising Canad 111 Simcoe St. N., Oshawa, Ontario L1G 484 RE -. S--, HEATHER ASHTON ASHTON BOOKKEEPING Small Business Specialist Computerized or Manual Bookkeeping, Accounting & Tax Services 190 Medd Rd., R.R..#1 Port Perry, Ontario LOL 1B2 (416) 852-3273 INSTANT RRSP LOANS AT PRIME"® IN NO TIME *Bank of Montreal's prevailing prime rate. A Bank of Montreal Instant RRSP Loan can hel 1992 RRSP contribution limit. Alan Knight, Branch Manager Ask your RRSP Specialist for details. 68 Scugog Street, Port Perry Plaza « 985-8446 Pp you take full advantage of your Jane Heacock, Personal Loans Manager aa Bank of Montreal We're Paying Attention Talk RRSP and go places ~~ sooner "than you think! Retirement planning is serious business. S60, come talk to a Laurentian Bank representative today!" Qualify for up to a ' ¥%2% more interest on your contribution - to a Laurentian Bank ° GIC RRSP.* At the same time, enter our super RRSP-Sunfun contest, with more than 100 great prizes to be won, including three dream cruises! Let's talk RRSP! You could be going places sooner than you think and it all starts at Laurentian Bank! 165 Queen Street 985-8435 LAURENTIAN BANK OF CANADA SINCE 1846 * For complete details on this offer, visit your branch of Laurentian Bank or Laurentian Trust. Offer and contest end March 1, 1903.