HFBoards

Go Back   HFBoards > NHL Eastern Conference > Atlantic Division > Montreal Canadiens
Mobile Hockey's Future Become a Sponsor Site Rules Support Forum vBookie Page 2
Notices

Ot-need Help From Someone Who's Good At Accounting And Taxation

Closed Thread
 
Thread Tools
Old
07-03-2008, 10:21 PM
  #26
Agnostic
11 Stanley Cups
 
Agnostic's Avatar
 
Join Date: Jun 2007
Country: Canada
Posts: 8,289
vCash: 500
Quote:
Originally Posted by Megaforce View Post
Find some expenses and claim them as deductions from the capital gains tax.
Expenses such as...?

Do you even file a tax return?

Agnostic is offline  
Old
07-03-2008, 10:27 PM
  #27
Megaforce
Registered User
 
Megaforce's Avatar
 
Join Date: Sep 2006
Location: St. Raymond NDG/Mtl
Country: Azerbaijan
Posts: 1,376
vCash: 500
If it's a piece of land claim a lawn mower, paint, etc.

Them's the kind of expenses that can offset a real estate capital gain.

Thanks for your interest in me and my personal tax situation. I'm deeply touched. Any other questions? Maybe you want to know when I last changed my undies?

Megaforce is offline  
Old
07-03-2008, 10:28 PM
  #28
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Quote:
Originally Posted by Megaforce View Post
Find some expenses and claim them as deductions from the capital gains tax.
You can't claim deductions for expenses on personal income (only business income).

Fido22 is offline  
Old
07-03-2008, 10:32 PM
  #29
Agnostic
11 Stanley Cups
 
Agnostic's Avatar
 
Join Date: Jun 2007
Country: Canada
Posts: 8,289
vCash: 500
Quote:
Originally Posted by Megaforce View Post
If it's a piece of land claim a lawn mower, paint, etc.

Them's the kind of expenses that can offset a real estate capital gain.

Thanks for your interest in me and my personal tax situation. I'm deeply touched. Any other questions? Maybe you want to know when I last changed my undies?
Perhaps if you had a clue you'd know that expenses can't be claimed against cap-gains, only to offset income. Since Capital gains is clearly not income your mower and paint (what are you painting the grass?) idea doesn't fit.

Agnostic is offline  
Old
07-03-2008, 10:45 PM
  #30
Megaforce
Registered User
 
Megaforce's Avatar
 
Join Date: Sep 2006
Location: St. Raymond NDG/Mtl
Country: Azerbaijan
Posts: 1,376
vCash: 500
You can also dig up another capital loss somewhere, maybe those lousy Nortel shares that tanked on you, sell 'em now while they're low, that should help too.

Megaforce is offline  
Old
07-03-2008, 11:02 PM
  #31
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Sure if you have capital loses in the same year they will be deducted from your cap gain. I would not incur a loss specifically for this purpose though. (lose a dollar to gain 30 cents or so depending on your marginal rate).

My recommendation is to contribute to your rrsp as much as possible to reduce your taxable revenue........or if your gf is still a low income earner, just pay the taxes this year and keep your rrsp space to lower higher marginal rate revenue when she'll be working.

rrsp are a good idea in of their own too, especially if she is young. Compound interest is the only true miracle in investment. Time is your greatest ally. Get some low cost index funds and let them sleep. 7-9 percent avg returns for 30 plus years equals the best money decision you will ever make. But I'm getting off topic.

Fido22 is offline  
Old
07-04-2008, 08:41 AM
  #32
mcphee
Registered User
 
mcphee's Avatar
 
Join Date: Feb 2003
Posts: 19,105
vCash: 500
People never call me to help with their taxes, though they do if a piano needs moving.

I want them to know that I may be smiling on the outside but I'm crying on the inside.

mcphee is offline  
Old
07-04-2008, 09:28 AM
  #33
Megaforce
Registered User
 
Megaforce's Avatar
 
Join Date: Sep 2006
Location: St. Raymond NDG/Mtl
Country: Azerbaijan
Posts: 1,376
vCash: 500
Quote:
Originally Posted by Fido22 View Post
Get some low cost index funds and let them sleep. 7-9 percent avg returns for 30 plus years equals the best money decision you will ever make.
This is good advice but first you'd have to have a good chunk of money at a very young age, second you'd have to be patient enough to wait until you're like 50 to enjoy it (who wants to be the 60 year old geezer driving the fancy sportscar?) and thirdly you'd have to find an investment that brings in that kind of annual return.

Most of the richer people I know scored their cash buying property and just waiting for prices to rise. Real estate prices were really low from about 1987 to almost 2000 here. Anybody who bought and kept a house in Montreal during that time is fairly well off now.

Megaforce is offline  
Old
07-04-2008, 10:18 AM
  #34
GoneAway
Guest
 
Country:
Posts: n/a
vCash:
So I got off the horn with CRA...

I dont get taxed per se...

My father in law does...He aint gonna like this

 
Old
07-04-2008, 12:39 PM
  #35
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Quote:
Originally Posted by Megaforce View Post
This is good advice but first you'd have to have a good chunk of money at a very young age,
You don't need a good chunck of money at a young age. At all. All you need IS young age. A person contributing 2k$ a year from age 25 til retirement into an rrsp will have 350k$ at retirement at 8% avg annual return. If you wait til you are 35 to start contributing your 2K$ annually, you will have 150K$. Wanna retire a millionnaire? Contribute 6k$ a year to your rrsp from age 25 onwards. At 8% returns, you will be there by age 60 (of course you will also have a sizeable investment portfolio before that).

Compound interest is the SINGLE MOST IMPORTANT INVESTMENT CONCEPT to grasp. It is an extremely powerful force. The only thing it requires, is the only thing you never get more of.....TIME. You want to achieve wealth, don't look for one in a million home runs that never come....use TIME. RRSPs are a beautiful TAX DEFERRED investment vehicle that allow compound interest principals to work to its fullest (cause you are not paying taxes on your annual returns, therefore you keep all your returns and gain further returns on it the next year, and the next year, and so on).

There are a lot of young posters here. Listen to this. Seriously. I don't think there is anything more important to know on finances.

Quote:
Originally Posted by Megaforce View Post
second you'd have to be patient enough to wait until you're like 50 to enjoy it (who wants to be the 60 year old geezer driving the fancy sportscar?) and thirdly you'd have to find an investment that brings in that kind of annual return.
Investing some each year is hardly "not enjoying life". You have to find an adequate balance, but beyond that....a young person can either live like they are rich or become rich...the two are mutually exclusive.

As for the returns I stated, they are the average returns of the S&P500 over the past 75 years.

Quote:
Originally Posted by Megaforce View Post
Most of the richer people I know scored their cash buying property and just waiting for prices to rise. Real estate prices were really low from about 1987 to almost 2000 here. Anybody who bought and kept a house in Montreal during that time is fairly well off now.
While I strongly believe that owning your own home is an important step in wealth building, real estate investments do not have long term returns above the stock market. We have just been through a BIG, BIG real estate boom. Of course returns in the past few years have been great. Historically, however, real estate returns are in the rage of 5% per annum. The S&P 500 has average yearly returns of 8%-9% over the past 75 years.

The past is no guarantee of the future, but a properly diversified portfolio of a young investor should, IMHO, have a very strong equity component.

Personally, I don't believe that anyone should pick individual stocks unless they are VERY savy investors and they know how to evaluate stock. Even then, this is way too risky to have anything above 5%-10% of portfolio in. I also don't believe in managed funds that charge high management fees (2%-3% of your total investment annually). 85% of managed funds fail to outperform the market used as a benchmark (largely due to the management fees).

I suggest just low cost index funds. I prefer TD's e-series funds. 0.3% fees only. They offer TSX index funds for canada. S&P500/DJIA/Nasdaq for US and a few international ones. No one manages these funds. They are periodically re-weighed to reflect the bechmark market. You get instant diversification (you are indirectly buying stocks of ALL the largest compagnies in Canada, the US, Europe or emerging countries). You get the average return of the country's economy basically.

Time also is the greatest risk minimizing strategy. Markets go up, markets go down. Predicting them is worse than predicting the weather, but over long periods of time the economy goes up. Even the DJIA recovered from the depths of the 1929-1930 crash with 15 years (the worse crash ever experienced). Oh and holding all your savings in "safe" certificates of deposit bearing 3% interest is very risky for a young person. You will bearly beat inflation and are essentially getting 0 return on your money. If you hold them outside rrsp and are paying taxes on the interest, you are making guaranteed negative returns every single year. This will kill a young person's portfolio in the long run. Certificates of deposit have zero capital risk (under 100K$), but have significant interest risk. Diversity is best, but IMHO a young investor should have no more than 15%-20% of long term assets in fixed income guaranteed capital.

If you have 20-30 years to play with in your tax deferred rrsp accounts, you have the most fantastic investment opportunity known to man.

Start early people!



Quote:
Originally Posted by Lord Chezz View Post
So I got off the horn with CRA...

I dont get taxed per se...

My father in law does...He aint gonna like this
Is the transaction you are talking about a gift from your father in law to your gf or your gf now selling land that she previously received as a gift?

If it's the former, then yes it's your father in law that is disposing of the land and will have to pay cap gains on it.


Last edited by Fido22: 07-04-2008 at 01:22 PM.
Fido22 is offline  
Old
07-04-2008, 12:46 PM
  #36
GoneAway
Guest
 
Country:
Posts: n/a
vCash:
Quote:
Originally Posted by Fido22 View Post
You don't need a good chunck of money at a young age. At all. All you need IS young age. A person contributing 2k$ a year from age 25 til retirement into an rrsp will have 350k$ at retirement at 8% avg annual return. If you wait til you are 35 to start contributing your 2K$ annually, you will have 150K$. Wanna retire a millionnaire? Contribute 6k$ a year to your rrsp from age 25 onwards. At 8% returns, you will be there by age 60 (of course you will also have a sizeable investment portfolio before that).

Compound interest is the SINGLE MOST IMPORTANT INVESTMENT CONCEPT to grasp. It is an extremely powerful force. The only thing it requires, is the only thing you never get more of.....TIME. You want to achieve wealth, don't look for one in a million home runs that never come....use TIME. RRSPs are a beautiful TAX DEFFERED investment vehicle that allow compound interest principals to work to its fullest (cause you are not paying taxes on your annual returns, therefore you keep all your returns and gain further returns on it the next year, and the next year, and so on).

There are a lot of young posters here. Listen to this. Seriously. I don't think there is anything more important to know on finances.




Investing some each year is hardly "not enjoying life". You have to find an adequate balance, but beyond that....a young person can either live like they are rich or become rich...the two are mutually exclusive.

As for the returns I stated, they are the average returns of the S&P500 over the past 75 years.



While I strongly believe that owning your own home is an important step in wealth building, real estate investments do not have long term returns above the stock market. We have just been through a BIG, BIG real estate boom. Of course returns in the past few years have been great. Historically, however, real estate returns are in the rage of 5% per annum. The S&P 500 has average yearly returns of 8%-9% over the past 75 years.

The past is no garantee of the future, but a properly diversified portfolio of a young investor should, IMHO, have a very strong equity component.

Personally, I don't believe that anyone should pick individual stocks unless they are VERY savy investors and they know how to evaluate stock. Even then, this is way too risky to have anything above 5%-10% of portfolio in. I also don't believe in managed funds that charge high management fees (2%-3% of your total investment annually). 85% of managed funds fail to outperform the market used as a benchmark (largely due to the management fees).

I suggest just low cost index funds. I prefer TD's e-series funds. 0.3% fees only. They offer TSX index funds for canada. S&P500/DJIA/Nasdaq for US and a few international ones. No one manages these funds. They are periodically re-weighed to reflect the bechmark market. You get instant diversification (you are indirectly buying stocks of ALL the largest compagnies in Canada, the US, Europe or emerging countries). You get the average return of the country's economy basically.

Time also is the greatest risk minimizing strategy. Markets go up, markets go down. Predicting them is worse than predicting the weather, but over long periods of time the economy goes up. Even the DJIA recovered from the depths of the 1929-1930 crash with 15 years (the worse crash ever experienced). Oh and holding all your savings in "safe" certificates of deposit bearing 3% interest is very risky for a young person. You will bearly beat inflation and are essentially getting 0 return on your money. If you hold them outside rrsp and are paying taxes on the interest, you are making garanteed negative returns every single year. This will kill a young person's portfolio in the long run. Certificates of deposit have zero capital risk (under 100K$), but have significant interest risk. Diversity is best, but IMHO a young investor should have no more than 15%-20% of long term assets in fixed income garanteed capital.

If you have 20-30 years to play with in your tax deffered rrsp accounts, you have the most fantastic investment opportunity known to man.

Start early people!





Is the transaction you are talking about a gift from your father in law to your gf or your gf now selling land that she previously received as a gift?

If it's the former, then yes it's your father in law that is disposing of the land and will have to pay cap gains on it.
Both will happen within a week

 
Old
07-04-2008, 12:53 PM
  #37
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Quote:
Originally Posted by Lord Chezz View Post
Both will happen within a week
Why doesn't her father just sell the land to the buyer directly and give the money to her daughter instead of giving her the land and then having her sell it?

Fido22 is offline  
Old
07-04-2008, 12:54 PM
  #38
GoneAway
Guest
 
Country:
Posts: n/a
vCash:
Quote:
Originally Posted by Fido22 View Post
Why doesn't her father just sell the land to the buyer directly and give the money to her daughter instead of giving her the land and then having her sell it?
Wouldnt he then have todeclare capital gains?

 
Old
07-04-2008, 01:07 PM
  #39
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Quote:
Originally Posted by Lord Chezz View Post
Wouldnt he then have todeclare capital gains?
He would have to declare it anyways at the time of the gift (remember it's a deemed disposition). It comes out to the same thing.

Scenario 1

1. dad gives land to daughter. Gift is treated like a sale for tax purposes. Dad has to pay taxes on capital gains (that is an amount equal to his marginal rate X [(fair market value at time of gift - adjusted cost base) / 2].

2. daugher sells land to third party. She shouldn't have any capital gains (the land will not have increased in value in a week).

Scenario 2

1. dad sells lans to third party. He pays capital gains.

2. dad gives money to daughter (not a taxable event in Canada).


Am I missing something?

I understand that it is preferable to have the daughter incur the cap gain as she has lower income probably (thus the cap gain will be taxed at lower bracket), but I don't see how one can argue that the land increased in value while it was in daughter's hands if only a week went by.

You have other ideas?

Fido22 is offline  
Old
07-04-2008, 02:05 PM
  #40
GoneAway
Guest
 
Country:
Posts: n/a
vCash:
Quote:
Originally Posted by Fido22 View Post
He would have to declare it anyways at the time of the gift (remember it's a deemed disposition). It comes out to the same thing.

Scenario 1

1. dad gives land to daughter. Gift is treated like a sale for tax purposes. Dad has to pay taxes on capital gains (that is an amount equal to his marginal rate X [(fair market value at time of gift - adjusted cost base) / 2].

2. daugher sells land to third party. She shouldn't have any capital gains (the land will not have increased in value in a week).

Scenario 2

1. dad sells lans to third party. He pays capital gains.

2. dad gives money to daughter (not a taxable event in Canada).


Am I missing something?

I understand that it is preferable to have the daughter incur the cap gain as she has lower income probably (thus the cap gain will be taxed at lower bracket), but I don't see how one can argue that the land increased in value while it was in daughter's hands if only a week went by.

You have other ideas?

I think it'll come down to about 3 grand or so...

I already figured out the inflation rate between now and then...I just need to find the value of the land in 1975

 
Old
07-04-2008, 02:31 PM
  #41
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Btw, Congrats on the house LC!

Very cool. Have you guys found it yet?

Fido22 is offline  
Old
07-04-2008, 02:33 PM
  #42
GoneAway
Guest
 
Country:
Posts: n/a
vCash:
Quote:
Originally Posted by Fido22 View Post
Btw, Congrats on the house LC!

Very cool. Have you guys found it yet?
Nope....Gottapay off some dept first...then we'll start looking


But probably a new semi detached just outside of Moncton

 
Old
07-04-2008, 02:34 PM
  #43
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Quote:
Originally Posted by Lord Chezz View Post
Nope....Gottapay off some dept first...then we'll start looking


But probably a new semi detached just outside of Moncton
Excellent. All HFers are welcome over when in the Moncton area I suppose goes without saying.


Fido22 is offline  
Old
07-04-2008, 02:43 PM
  #44
GoneAway
Guest
 
Country:
Posts: n/a
vCash:
Quote:
Originally Posted by Fido22 View Post
Excellent. All HFers are welcome over when in the Moncton area I suppose goes without saying.

Indeed!

 
Old
07-04-2008, 06:22 PM
  #45
Megaforce
Registered User
 
Megaforce's Avatar
 
Join Date: Sep 2006
Location: St. Raymond NDG/Mtl
Country: Azerbaijan
Posts: 1,376
vCash: 500
I understand some of the numbers quoted above and appreciate the argument for investing from a young age but I remain a little unconvinced that it's entirely realistic for anybody who hasn't simply accepted a life of drugery.

Is it really a realistic scenario that a 21 year old is socking away $2,000 a year? Perhaps, but that's assuming he's got a job working full time and what kind of jobs are young non-university people getting? Bad ones, sayeth I.

Most smart young people are still in school doing university, it's a concept known to the middle classes as deferred gratification.

Age 23 or 35 or whatever, is when the smart kids are graduating. They go hang out in Asia for a year, at 27 they start work. By 32 they've paid off their student loans. They've got no debts but they've also got no savings. Thanks to their education they're making bigger money than someone entered the workforce early.

So sure the university grads don't have the fruits of those early investments but they've got a better job that uses the brain and is ultimately far more gratifying and offers them more prestige and pleasure.

Also, in spite of your stats, I'm far more of a fan of real estate as a vehicle to create wealth than the stock market. I think the stats are skewed because a minority are looking at land as an investment - most are looking at them as homes rather than ways to make money.

Real estate is the place to be for someone with a brain and a plan, unlike stock markets where little investors are always the first to get screwed by the boys in the corporate boardrooms.

Megaforce is offline  
Old
07-04-2008, 07:25 PM
  #46
Fido22
Registered User
 
Fido22's Avatar
 
Join Date: Jun 2006
Posts: 5,690
vCash: 500
Only 3 ways to avoid a life of drugery that I know of: 1) be born to money, 2) marry money or 3) actually enjoy what you do and your life

Amassing wealth should not be the object of life. This is a recepy for unhappiness. Never condition happiness on a future realization. Especially not money. Money gives security and short lived boost of pleasure when spent, but not happiness. Trust me, I'm surrounded by people in that situation in my personal and professional life. You are who you are whether you have money or not. The goal is to have a meaningful life and enjoy the ride. How one handles personal finances is important but ancilliary to that.

As for my examples, I started at 25 as that is when most uni grads start working seriously. I have a bachelor, a masters, have travelled quite a bit, have done bar school and started working seriously at 25 with student debts and all. My numbers seem quite realistic to me, but whatever what I was trying to illustrate is the explosive power of compound interest. That is a key concept to grasp at a young age.

As for real estate, sure. I talked about the investment vehicle I know and trust based on historical returns and what I do. Index funds is also easy and accessible to all. Buy an index fund in a rrsp, sell it 30 years later. Don't buy and sell and try to time it, you'll lose. Simple and evrybody can do it. Real estate is quite the valid vehicle as well. It does take quite a bit of knowledge however (like picking individual stocks). It is not for the profane. I know little on real estate investing. If that's what you prefer, that's very valid and I wish you luck.

Cheers!


Last edited by Fido22: 07-04-2008 at 08:24 PM.
Fido22 is offline  
Closed Thread

Forum Jump


Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 06:43 AM.

monitoring_string = "e4251c93e2ba248d29da988d93bf5144"
Contact Us - HFBoards - Archive - Privacy Statement - Terms of Use - Advertise - Top - AdChoices

vBulletin Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. 2014 All Rights Reserved.