Whltby ,Fme Preps, W*eiqy. January Z6, 1994, Page 9 - - - Some real estate les stil exemPt from litfetim e capital gains tax, ByiIEY T.KailgyOCA (MC) if you own real estate that is used inan active business, you may be confused about how the restrictions imposed on the ifetime $100,000 calpital ao "ptionthat'wereitoue in 99 wllaffect yurproperty. The fact in, notaligains on the sale cf re estate are affected by the new rul... Thons gains realized on the. sale of rad estate used in an active business continue toqua-f for the ful exemp tion :nd 'are not subject te the pasm-out rules. In the February 1992 federal budget, regulations were CGAto hold seminar The Cerified General Accoun- tants Association, Durham chap- ter, will hold a seminar on Thursday, Van. 27 in Pickering Ia Yun, of RBC Dominion Securities, will discuss 'Invest- mente and RRSPs in the Nine- ties,' at the Regalis Restaurant, 1305 Pickering Parkway, start- ing at 5:30 p.m. Costije $20 for oertiied general accountants and- guests, $18 for students. For tickets or more information caîl John Dimopou- los at 905427-0864 or 416-506- 8888. Each year, Revenue Canada Taxation sponsors a community- based prograin te provide assistance to people Who, for a numrber of reasons, are unable te complet. their income tax returns themselves. Community groups, cultural and ethnic organizations, as well as individuals, are encouraged te participat. in the program. It helps if you are able te complet. your own returri. However, no previous experience is necessazy, only the. desire te help others. The taxation department, through public affairs officers, gives training te, thos. who wish te volunteer. Changes te the year's incarne tax returris are discussed, and volunteers are introduced to restrict dlaims under the exemption for gains on most types of real estate, including homes and investment or rentai properties. The principal residence exemption was not affected by the. new restrictions, so essentially second homes, such as cottages,' ski chalets or Flonida condominiums and rentaI properties, were affected. The capital gains exemption is onl *ab ile teindividuals, so any real estate must b. personally owned. The new rules state that, when a progerty that was owned before March 1992 is sold, the exempt portion cf apy gain willb9:e shown how te complet. returne of those they assist. When training is complet., volunteers offer help te, those moet in need: low-income earners, the elderly, disabled, newcomers te, Canada and those with language difficulties.epeedt complet. straightforward returns and if a difficulty is experienced,hepi only a telephone cail away at the local district taxation office. Acting as a tax volunteer is both easy and rewarding. Any =ru or individual interested in tdg part in the program should contact the public affairs officer at the. Scarborough district taxation office at 1-800-387-5229 (tellfree). pro-rated evenly over the nurnbei of months of ownership befon March, 1992. Thus, if a cottage or renta property was owned for Yl months before March 1992 anc for 18 months after Februar3 1992, haif of any gain willqulf for the capital gain exemption, Aygains on real estate acquired atr February. 1992 are not eligible for any portion of the exemption. However, real estate that is owned personally or through a trust, and is used in an active business, continues te quaiy for the full exemption and an gains will not b. restricted under the 1992 rules. Generally, an active business is any type of business that is not an investment business. Thus, motst businesses qÙalifyj. lIn a typical situation,' you would either leas. the property te an incorporated active busineu or you would own the property which would be used in your unincorporated business. Most rentai property businesses are not active businesses. To qualify as an active business, you would generally have te own a larger rental complex or severaLe maller properties, and you muet employ at least six people, one of whom can be yourself. Moneycare is general financia advice by Canadas. chartered accoantanta. Keilty ws a tczx part ner wit& Arthur Andersen & Co. RRSP seminars to be heldi in Oshawa Derek Dutka of Financial Concept Group is sponsoring a series of RRSP seminars. Each Thursday at noon, from Jan. 20 throgh, te Feb. 17, Dutka will conduct RRSP selection and strategy seminars. H. âIll conduct three evening seminars Feb. 2, 9 and 17. The evening format begins at 7 p.m. and covers the same topics in more detail. Ail seminars will b. held in the board room of the Financial Concept Group office, 106 Stevenson Rd. S., Oshawa. Seating is limited. Cail 579-7777 for reservations. Your Financial Health Derek Dutka Capital gains in RRSPsý Since capital gains and dividends are taxed less than interest income, many investors are told they are wasting thei tax benefits by holding stocke or stoek-based mutual funs within their RFRSPs. Ites a poopular strategy, but one with These adtsors dlaimi that any income investors receive within their RRSPs will eventually be taxed at their ful ersonal rate when they withdraw their funds. Indeed, that wilhappen when they collapse their RRSPs and convert them te an annuyr r RRIP. RRS s greatest benefit is its long-term coinpoundinU (tax-free) effect. I encourage people to make use of the $100,000 capital gains exemption (it mayflot b. here much longer) but I stili maintain that inot peopl~e should maximize their ÃRRSP before investing e1sewhee. The RRSP is the only investment that wiIl give you an immediate tax break of up te 50 per cent (depending on your incomne level). Once started, the. purpose of the RRSP is te grow inte as large a neat e gg.as is possble. The purpose of buying stocks (capital gains) is te earn 'a higher rate of return than interest-bearing vehicles offer. Forgoing traditional tax benefits associated with receiving capital gains is malcingr sense because investers cari reinvest profits free of tax within an RRSP for an extended period. Earnng a higher rate means a much larger nest egg. For example, even 1 per cent more per year, for a person starting at age 30 through te e 65 putting aiide $1,000 a year, could mean an additional $200,000 available for retirement. Given these conditions, potential investors ought te seriously consider putting stocks inside their RRSP. If you are like mont investers and lack the patience, skill and discipline te manage your own equi portfolio, consider an equity mutual 1uind as on. of your =RP investmients. Ho* much of your RRSP shoùld be invested in equities? One rule of thumb is: subtract your age fromn 100. The resulting number (e.g. 100 nus eýa e 55 - 45) in the Percentage of your RRSP that should b. eid in equities. Tins provides a igood starting point, but there are obviously many other factors te consider in your own personal situation. Mutual funda are liquid, diversified and manage professionally. Talk te a financial planner about the amount of equl ty and the specific funds that are mont appropriate to your own financial goals and needs. Derek DuLka is afinancial consultant in the Jl7itby/ Oshawa Mutual fund forum upcoming in Oshawa On Saturday, Jan. 29, Fortune F'inancial of Whitby will host a mutual fund forum at the Holiday Inn in Oshawa. Eight tep-ranking Canadian mutual fundi companies will have displays and representatives at the forum te provide information on investment options with tIùs year's RRSP investers. For those who want te learri about investing in the. Far East, Latin Arnerica, Europe, international bonds and more, there will b. a host of mini-investment seminars on an ongoing basis throughout the, day. Investers usually have to go inte Toronto for a presentation like tis, " says Jeif Douglas, branch manager of the Whitby off Ice. "But our Fortune office in Whitby is bringing Bay Street ta Durham Region." Cali 430-0333 for details. mGAVIE VoWddJfJTWaffZIZ1f OfofI FREE SEMINARShts Jan. 27, Feb. 3, 10 & 17 - l2noon Feb. 2, 9&17 - wpm sheltered growth M M Use the balanced approach to enhance your RRSP returns. The RRSP with 40% more tax savings! 1M Intearate vour RRSP into vour overali investment strateav. RRSP Selection and Strategy * And much more. ýffl FiaradaïGet the miost ot of your RRSP. Conceëpt Cail for reservations NOW! Seating is Iimited. Securities ToeaCeoeç Seailis s bMÉis*ro*wWby F£C.G.SoaaM% Copmïmo Seiît~ VAifbyandQsawasi1e098 Stevenson Rd. S., Oshiawa OZ79 ýA..,77 j-' DEREK DUTKA MW Aw - - .% %Olkg %41,%.Ozljr . Senn Whitby and Oshawa shS 1986