Options abound for mom’s real estate ventures J.H.S) MOTHER-IN-LAW has just sold her home and moved to a less expensive place. “She invested her profit in term deposits and will now have to pay quite a bit of extra tax on the in- terest she is earning,” said J.H. “Our daughter is getting mar- ried, but they can’t afford to buy a home. Is there some way mum can help out the kids and also save on tax?’’ Yes. Depending on her other assets and her income needs, your mother-in-law could: ® Buy a home as an investment and rent it to the kids. Mum’s rental income would be less than the interest she’d earn on the money, but over the long term she could earn a capital gain (possibly tax free) if the property rises in value. ¢ Buy a home and let the kids gradually buy the place — or at least an interest in it — from her. ® Lend the kids money to enable them to buy a home. If she didn’t need the extra income, the kids could repay only the principal. If she did charge interest, she’d earn a little more than term deposits yield and the kids woutd pay a lit- tle less than a normal mortgage. Those are just a few ideas. Make dollars and sense Michael Grenby 12%4% 30-89 DAYS — in other words, the idea was not to flip the property for a quick profit — the parent's share of the gain should then be considered a capital gain.”’ Luongo also stressed the need to have any such arrangement carefully structured so the child couldn’t put a second mortgage on the property without the parent’s permission, for example, and that the parent’s interest would be bought out in case of marriage breakdown. . zee Mike Grenby is a Vancouver- based columnist and independent personal financial adviser who will answer your questions as space allows in his column. Write to him c/o North Shore News, 1139 Lonsdaie Ave., North Vancouver V7M 2H4, S years 12%% ALL RATES SUBJECT TO CHANGE WITHOUT NOTICE 25 - Wednesday, May 16, 1990 - North Shore News BOOK NOW! Our reservation office is now taking bookings for the 1989 summer season. This world “lee famous wilderness resort with LAKES RESORT it's tranquil ‘close to nature’ B.C.'s Mast Unique setting offers relaxation away High Coury Adve from the telephones and tv. Please Call Joan or Bill 499-5848 Or Write: R.R.#1, Cawston, B.C. VOX 1CO RETIREMENT PLANNING SEMINARS RRIF OR ANNUITY... TAX PLANNING IN THE '90's... which is better for you? an outline of new legislation INVESTMENT STRATEGIES... taking advantage of current high interest rates NORTH VANCOUVER * Deibrook Community Centre May 24th - Oak Room May 29th 600 West Queens Street WEST VANCOUVER * Park Royal Hotel River Room 540 Clyde Ave. 730-930 pm 130-330 pm May 28th 130-330 pm There is no charge for the seminar but, as space is limited, we ask that you call to reserve your place at the location of your choice. VANCOUVER 815 West Hastings Street. VANCOUVER 5701 Granville St. at 4ist Ave. NORTH VANCOUVER Lonsdale Quay NEW WESTMINSTER 435 Columbia Street 683-7283 263-7283 983-3773 524-2288 sure you get expert legal and fi- nancial advice in making any such arzangements, for the protection of all involved — and to avoid any Phone: 638-9577 or, toll-free at: 1-800-663-0644 unexpected tax consequences. Peter and Marie Baigent, of Balanced Financial Services, are independent investment and in- surance brokers. ‘We have six children so have had to come up with a program fair to all as far as helping them with housing,”’ said Peter. The Baigents are prepared to lend each child up to 10 per cent of the purchase price of a home to a maximum loan of $15,000. It’s an interest-free loan secured by a zero interest second mortgage on the home. The child must be married and the home in joint names. No payments are required but the loan must be repaid in 10 years (or sooner if the piace is sold or refinanced) ‘‘because we'll then need the funds for our retire- ment,’’ said Peter, adding: “If the property is not in the province, a smaller loan is avail- able. This is an outright bribe to encourage our kids to settle here!’’ The Baigents expect to earn a return on their funds through a share of any gain in the value of the child’s home. Baigent feels this gain would be considered as a capital gain, tax- free under the capital gains exemp-. tion or only 75-per-cent taxed if the exemption is used up. However, Elio Luongo, senior tax manager of Peak Marwick Thorne, chartered accountants, warned that Revenue Canada might tax such a gain as full in- come and proposed that sharing the purchase might be a better ap- proach, “The second mortgage securing the loan could be considered as a participating mortgage, so the profit paid to the parents might then be considered interest or in- come — both of which would be fully taxed,’’ said Luongo. He suggested, as an alternative, that the parent(s) could be regis- tered as tenants in common on the title with, for example, a 10-per- cent interest in the property. The child’s interest would come from his or her down payment and the mortgage financing from a finan- cial institution. “Provided Revenue Canada did not view the arrangement as ‘an adventure in the nature of trade’ WHITE ROCK 1959-152nd Street CALGARY 506-6th Street S.W. 531-1123 266-7321 SOLGUARD FINANCIAL LTD. Consultants & Brokers since 1974 WHAT’S HAPPENED TO YOUR PROFITS? HOW TO CAPITALIZE ON A CHANGING MARKET Creative Real Estate Sales Tools For The Nineties A TWO DAY SYMPOSIUM ON THE TECHNIQUES THAT WILL ENSURE YOUR SUCCESS AS A REAL ESTATE REPRESENTATIVE DURING THE NEXT DECADE. May 1, 1990 — During the last five years securing a listing meant securing a sale. e In today’s changing market place, if -you wish to turn listings into sales, you must tilt the scale with creative sales techniques. As a realtor, it is time for you to confront the fluctuating economy, the changing market and traditional methods for secur- ing a sale. These current trends have dictated that you must stay ahead of your competition, financial influences and market shifts and, to achieve this, you must take action. Over the course of only two days, this symposium will enable you to reach your maximum potential by gaining a thorough knowledge of the two proven sales tools which will catapult your success by in- creasing both your listings and your commissions. For the first time in Canada, this is your opportunity to learn ail there is to know about. EQUITY SHARE and BUYER REPRESENTATION “The Real Estate Concepts of the Nineties” Unlike traditional “seminars”, in addition to gaining an understanding, education and history of various techniques, you will be taught the actual physical applications of Equity Share and Buyer Representation in order that you may take action to reach your goals immediately! And the reason you will take action immediately, is because as part of the sym- posium we will provide you with ALL OF THE LEGAL CONTRACTS, DOCUMENTS AND FORMS you will need to conduct pro- fit making deals with Equity Share and Buyer Representation the very same day. The thousands of dollars that went into creating these documents will be yours. For once, you will be educated and prepared for action! The symposium will be led by Michael Jenkinson, renowned pioneer and entre preneur of real estate investment concepts, and highlighted by guest lecturers who will be able to answer every question you will ever have with regards to Equity Share and Buyer Representation. The respected speakers you will hear over the course of two days will include noted professionals from the tegal, political and financial communities, as well as successful and influential business individuals from the United States who have pioneered and proven these concepts What you will learn and apply in these two days will set the course of your future Stop taking chances, invest in the only real guarantee in life - YOURSELF! Seminar Dates and Locations: Thursday and Friday, June 7 and 8, 1990 8:30 a.m. to 5 p.m. The Constellation Hotel, Toronto, Ontario {416) 675-1500 The Ansdel Group Thursday and Friday, June 14 and 15, 1990 8:30 a.m. to 5 p.m. The Sheraton Landmark, Vancouver, B.C. (604) 687-9511 The total cost for this exciting two day symposium, including all of the lectures, a comprehensive study program encased in a binder including transcripts of all lectures and techniques as well as all of the con- teacts, documents and forms is: $1545.00 per person at the door or, take advantage of pre-registration at the reduced cost of $1395.00 per person {A $500.00 Non-Refundable Deposit must be received by June 1, 1990, with the balance due at the door) *e** Special Group Rate °*** Buy Six Pre-Registrations, and pay for only five! VALUE ADDED BONUS: Our confidence in these techniques will be supported by a commitment that during the period of one year following the seminar, you will close a real estate transaction using one of the techniques taught at the conference (Receiving Commission) otherwise, our firm will personally transact one for you!! (Participants must attend full, two day seminar and abide by terms) FOR MORE INFORMATION PLEASE CONTACT THE ANSDEL GROUP AT (416) 858-2020 OR TOLL FREE AT 7-800-865-5484 Registration 1 limited, .0 please texpond quickly! 2476 Argentia Road, Mississauga, Ontario LIN 6M1 1205 - 675 West Hastings Street Vancouver, B.C. V6B 1N2