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Mackey & Bailey Barristers & Solicitors Saturday Momings 9:00am to 12:00 noon 985-7391 Lake Scugog Lumber Building Oshawa Rd., Port Perry Kelly, Zuly, Greenway, Bruce BARRISTER AND SOLICITORS Motor Vehicle - Criminal - Personal Injury Wills - Real Estate - Family Law Corporate & Commercial Evenings and Weekends by Appointment Taking advantage of Tax Shelters A look at how tax shelters can help you make the most of your income for many years to come Tax Shelters When people take shel- ter, it's usually because something exciting is hap- pening with the weather, like a tornado or hurricane. But people take shelter for other reasons too. For some, paying taxes can be like a tornado ripping through their gross income. Generally in higher tax brackets, these people take a different kind of shelter - a tax shelter. What is a Tax Shelter? Simply, a tax shelter is an investment that pro- vides significant deduc- tions against an investor's income. With these deduc- tions, an investor reduces their total taxable income, and the amount of tax they pay to Revenue Canada. While the types of tax shelters available have declined in recent years, there are still several avail- able. Investments in the resource sector, such as mining, oil and gas compa- nies, can provide a tax shel- ter. Other qualified invest- ments can include real estate and hobby farms. It is also important to recognize that a tax shelter 1s not a tax exemption, but a tax deferral. There will be a tax bill when the investment is sold and also for any income that it gen- erates. Not All Tax Shelters Are Created Equal The tax deduction received from a tax shelter 1s, of course, its main selling point. But it's also impor- tant to consider the quality of the investment, and not just the potential write-off. Factors to be considered include the risk involved with the venture (you could _ 114 King St. E., Oshawa 723-2278 [A Index Participation Units The Way To Go Fb Talk with Investment Advisor Robert J. Gow 434-7156 or RBC Peet DOMINION 1-800-267-1522 SECURITIES 117 Suncoe St. N. Oshawa, ON LIG 454 Balanced Planning Financial Group John Walhout, cma Independent Financial Advisor "For all your family's savings. investment, retirement and life insurance needs" 258 Union Avenue P.O. Box 3294 Prince Albert, Ont. LIL 1C2 (905) 985-2363 RESPs S400 GRANT for your child or grandchild's education Call me today and find out more. Personal Wealth Management™ Member CIPF How To Buy The Toronto 35 Index® Or The S&P 500 Index All At Once! Here's Why It Makes Sense To Diversify Your Portfolio With Index Participation Units Like TIPS 35™ Or Spiders. afety starts wath diversification, the the umits trading hike stocks In both experts agree. So, what could be cases, the Index Funds trade at 10% of the morc diversified than investing in value of their respective Indices. So take the Toronto 35 Index® in Canada, FIPS? from the professionals. With TIPS or the S&P S00 Index in re pa 15 Spi How Index Trusts Perform: Total Returns** 3 or Spaders Yr S Yr Product Name | YOU achieve , Toronto 35 Index: 16.4% 17.9% TIPS 35 dweratication. fates S&P 500 Index: 33.0% 20.2% SPIDERS | 'amdity and That's what case of access the United you can do when you invest in TIPS 35 1 to some of North America's leading Canada, or SPIDERS mn the United States companies -- all in one investment These Index Funds are set up as trusts, with And it only takes an mstant! For more information on TIPS 35 and other index-based investment trusts, please call Investment Advisor Robert |. Gow at (905) 434-7156. Toll-Free 1-800-267-1522. RBC ¢f DOMINION . SECURITIES nT Professional Wealth Management ivf "™ Trade mark of The Toronto Strack Exchange ® Wegrtered trade mark of The Tonto Ste k Faohange 11 * Value of 2 TIPS 35 umit ais exactly one-tenth of the value of the Toronto 15 Index" Value of 2 Sprder ac enact one tenth of the value of the S&P S00 Index ** Total Returnt are ac of Dec M1997 Umit valies wall Me tate one r time Pra performance does not accnre anlar future retiree L SHEPHERD & POWELL _ ---- CHARTERED ACCOUNTANTS ---- ACCOUNTING, INCOME TAX, FINANCIAL and ESTATE PLANNING & CONSULTING SERVICES geared to INDIVIDUALS ~ SMALL BUSINESSES ~ FARMS TAX RETURNS PREPARED » 'E-Filing' At No Extra Charge Assistance In Filing Government Forms & Returns New Business Planning & Startup Expenenced, Courteous Staff Evening & Weekend Appointments Available FREE INITIAL CONSULTATION ® PERSONAL, CONFIDENTIAL SERVICE DAVID R. POWELL, B.coMM., M.BA., CA. 250 Queen Street, Port Perry * 985-9791 (next to Shoppers Drug Mart) L SCUGOG FINANCIAL _| SERVICES INC. GUARANTEED.INVESTMENTS. e Annual Rates 5.125% 5.375% 4.250% Rates subject to change without notice Serving Scugog For Over 15 Years 250 Queen Street, Port Perry * 985-3832 (next to Shoppers Drug Mart) lose money) and whether or not the investment will provide cash flow. Another factor to con- sider 1s the structure of the tax shelter. Most shelters are constructed as either a limited partnership or a flow-through share. In a limited partnership, only the amount invested 1s at risk, in the event of a liability arising. However, this also limits the amount of deductions available to the "at risk" amount. With a flow through share, an investor can claim certain expenses incurred by resource companies. These expenses "Flow through" the company to the investor and are deductible by them. Possible Drawbacks Of Tax Shelters It 1s often difficult to sell a tax sheltered investment -once the tax deduction has been taken - so investors should view a tax shelter as a long-term investment. Another possible draw- back of a tax shelter is that an investor may be subject to Alternative Minimum Tax. This tax is targeted at people with higher incomes who have significant write- offs from tax shelters. The calculations for this tax are usually comphcated. and your tax advisor should be consulted. Note: the above article 1s for information purposes only and should not be con- strued as offering tax advice. Individuals should consult with their personal tax advisors before taking any action based upon information contained in this article. Courtesy of, Robert J Gow, Investment Advisor RBC Dominion Securities, 11 Simcoe St. N_, Oshawa IF YOUR AD WAS HERE in the PORT PERRY STAR & WEEKEND STAR more than 50,000 people would have been exposed to Its message this week For Advertising Made Easy CALL (905) 985-7383 or Fax (905) 985-3708