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"A Family Tradition for 127 Years" PORT PERRY STAR - Tuesday, January 25,1994 - 19 Capital gains! Is exemption on its way out? Background On The Capital Gains Exemption (CGE) The conservative govern- ment introduced the CGE in 1985 and although they chipped away at the exemption over the years, they seemed reluctant to remove it completely. The Lib- erals are on record saying the ifying small business corpora- tion, you can crystalize the CGE by transferring your shares to another corporation or by reor- ganizing the share capital of the company. Summary As you can see, there are a number of ways to crystalize losses, among others, which must be considered when com- pleting a crystalization of the CGE. Proper planning and pro- fessional tax advice are crucial to ensure that the expected re- sults are achieved. Forder-Parks Insurance Brokers Inc. Porsonal attention to all of your (CH HN OF 5 YEAR 0° CGE isnot appropriate. your CGE. However, there are po our tesy of general insanance needs. Reasons for some pitfalls like alternative Senior Tas Manager, Crystallizing minimum tax, the cumulative BDO Dunwoody 34 Water St., Port Perry, Ontario L9L 1J2 Our BUST Fatt There is speculation that the netinvestment loss account, so- Ward Mallette 2985-8471 Sri et a Chase witha February 1994 Liberal budget cial benefit drawbacks and al- Churiered Accountants may eliminate the CGE, there- lowable business investment Uxbridge fore if you can take advantage of the exemption now, you may be | ot Save an e xtra 9% in taxes on your RRSP contribution this year of Crystallizing CGE 1. If you own an unincorporat- Investment Objective Working Ventures" objective is to produce the superior returns ed business and are planning on selling it to a third party, you traditionally associated with investment in dynamic and growing businesses. while minimizing risk through prudent should consider incorporating the business and selling the shares to the third party. If the shares qualify, you may be eligi- ble for a $500,000 CGE. 2. If you own a cottage proper- ty on which you cannot claim the principal residence exemp- tion, you could consider trans- ferring the property to your family members. The transfer con take the form of a gift or a sale. You can use your pro-rated $100,000 CGE to reduce the amount of the gain that is taxa- ble. 3. If you own marketable se- hile mutual funds are generally designed to reward investors in the long run. there's an investment fund that gives you an immediate tax advantage. Working Ventures Canadian Fund gives curities with a current value , higher than their cost, you vou a 40% headstart over just about every other Here's an example: development and management of the fund. fund in Canada. Co ; i rater ermine ve ding wee remo Th Investment in Working Ventures $5.000 on Private equity im > olves yg capital gain. The Power Of Working Ventures Tax Savings Ss2500 | Ne tt are nt encourtercc WIT many omer 4. If . Drax dodo investments. Although Working Ventures provides . If you own a rental proper- Canadian Fund - RRSP tax deduction : ) , hg ty, it could be transferred to a (at 50% assumed t ) you with a tax credit to help offset those risks, it > Now, you can take advantage of a unique al Wo assumed lax Tak . EE family member or a corporation nn ha Federal Tax Credit (SAM $14 cannot guarantee that its investments will ean a to trigger a capital gain. If you nvese fund - Working Ventures Canadian Fund - ederal Tax Credit (520) - $1.000 specified rate of retum. or any return. in the short have claimed depreciation for that could permit you to reduce this years taxes by Provincial Tax Credit® : or long term. In addition. a private equity tax purposes on the property Ho Thats 10 is po ie tax benefit of just (20% where applicable) - $1,000 investment involves a longer term commitment. en there may be taxable In- about every other RRSP in Canada. : come callag recapture which is You receive $2.000 in tax credits® by investin Your fet Cost Jon Poised For Growth not eligible for the CGE. TOU Reeuve SoM IS ROOST BY ives Your Total Tax Savings $4,500 Due to the current economic environment, 5. Farm property can be S5.000 in Working Ventures Canadian Fund. Working Ventures is in an ideal situation. prepared to take advantage of investments in under-valued businesses and positioned to profit as the economy turns around. transferred to a family member or a corporation to trigger a cap- ital gain. Again, the Income Tax Act provides some flexibility in the amount of the capital gain you want to report when trans- ferring farm property. 6. If you own shares in a qual- The fact that Working Ventures shares are alo eligible for an RRSP means further tax breaks. For instance. if you are in a S00 marginal tax bracket. a $3,000 contribution to an RRSP would reduce vour taxes by a further S2.500, for a total of S4.500 (52.000 + $2500) in tax savings And. while a majority of the fund's assets will be invested in enterprising businesses to maximize return potential, risk is tempered by investing a significant portion of assets in short-term, high quality government Your mvestment will primarily be reinvested in promising, growth- securities t oriented small and medium size businesses in your provinee, Experience That Counts Key to the performance of the fund is the expertise and expenence of its management team headed by Ron Begg, President. His track record of success combines senior corporate management disciplines with the hands-on company-huilding skills of a successful entrepreneur. This complements well The information contained herein is not complete. Prospective investors are advised to refer to the Working Ventures" prospectus for complete details of the offering. - .- ~ . EMMERSON INSURANCE BROKERS LIMITED Class A shares of Working Ventures are offered for sale solely under the terms of a prospectus | accepted for filing in all Canadian provinces and temtones Copies of the prospectus may be Ck obtained only from persons duly qualified and licensed to distnbute these secunties 193 QUEEN ST., PORT PERRY, ONT. 19.189 (416) 985-7 the investment and finance background of Jim Hall, Vice-President Investments "The extra provincaal tax credits are available to investors resident in Saskatchewan. Ontano and cL i ) : | Prince Edward Iskand ALL LINES OF lim has solid professional credentials from public accounting and merchant } ' So on HWorking Ventures is subject 1o certain intenm investment restrictions which are described in the GENERAL banking. and a record of originating and managing successtul investments. Jim amendment to Working Ventures. prospectus offers a prudent. disaplined and seasoned approach to the development of a strong. diversified investment: portfolio INSURANCE NI | NATIONAL TRUST A Division of National Victoria and Grey Trustco 9b 1 YEAR ANNUAL INTEREST 5.25% - 5 Year Annual Rates Subject to Change without Notice. For more information, call: BOB GOW (905) 434-7156 « 1-800-267-1522 Investment advisors to Canadian enterprise and enterprising Canadians 111 Simcoe Street North, Oshawa, Ontario L1H 7M9 WORKING VENTURES CANADIAN FUND INC. Discover How Working Ventures Can Work For You