ebruary 20, 1994 - North Shore News - 23 JWILCOTT & Co. CGA Professional Accounting Services PERSONAL & CORP TAX Business Plans Cash Flow 926-1954 Joint account could save cash HOW YOU declare the inter- est from a joint account, or from other deposits and invest- ments in joint names, could save — or cost — you hun- dreds and even thousands of tax dollars. “Always try to have the family member(s) in the lower tax brackel ‘report as much as possible of the investment income.” said a Certified General Accountant (CGA) in public practice who spe- cializes in tax planning, “However, to do that you must be able to trace the investment capi- tal back to that individual — typi- sally through money carned, won or inherited — in case Revenue Canada comes knocking.” The tax.department doesn’t care whose name is on an investment, but only where that money came from, said the CGA. “In other words, if you and your spouse have a joint account and receive a tax slip in both names, you should report the investment income according to whose money went into that account.” Let's say the account is in joint names for convenience, but.it’s the husband's money. Then the husband is supposed to declare all the income; just because -it's a joint account doesn’t mean you may split the income 50-50. “On the other hand, if the wife has worked outside the home in the Build Your past. or she has inherited or won some money, then perhaps some or aff of the deposit or investuent could be traced back to hee money." the CGA said. The CGA stressed you may do this even if the tax stip shows both names or the husband's name alone. You might put a note on the ship along these fines: “The capital that produced this investment income was carned/inherited/won by Jane Smith, even thought the investment is in both our. names/in John Smith's namie.” If the spouse in the lower tax bracket could have been declaring the investment income in past years but didn’t. you niay ask Revenue Canada to go back as far as }985 to reassess your returns to change the way the interest and other invest- ment income was reported. (This is anew rufe: in the past, you could go back only three years.) “The person in the lower tax bracket will then get a tas bill while the person in the higher bracket will get a (larger) tax refund.” the CGA said. Whenever you ask Revenue Canada to go back and reassess a past tax return, realize the depart- ment will indeed review all aspects of that return. . And you might also be asked to provide proof that, in the above example, the investment capital can be traced back to the spouse in the lower tax bracket. SP Portfolio With Fidelity. Fidelity Capital - Builder With interest rates so low, now is the time to consider investing in Canadian equities. Particularly in a performer like Fidelity Capital Builder Fund. Capital Builder Fund, which is fully eligible for your RRSP, reflects the same principles that have made Fidelity Investments* North America’s largest mutual fund manager — in- house research, personal assessment of target companies, and technical resources second to af none. Look to Fidelity Capital Builder Fund to Three-Year Performance" 05: Five-Year Performance" *As of December 31, 1993. build your investment portfolio. frwestinents* Canada “The tax savings certainly war- rant the effort” said the CGA, and guve (he following example. Lets say the husband (in the 45% tax bracket) and wife (in the 26%. lax bracket) had been report- ing $5,000 income a year from investments in the husband's name, bat the investment capital could be shown as the wife's money. Having their tax returns reassessed Tron: 1985 through 1992 would save about $7,600 in tix. In addition. having the wife report the SS.000 a year from 1993 on would save the couple about $950 a year in tax, Even if somebody else prepares your returns, you need to point out whose capital produced the invest- ment income. whether tram sav. ings. term deposits, dividends, capi- tal gains, rental or business income, The Working Opportunity Fund is a tax assisted pro- gram. For every dollar you invest in the Working Opportunity Fund, you receive « 20¢ Provincial Tax Credit ond a 20¢ Federal Tax Credit. if you contribute your Working Opportunity Fund shares fo an RRSP your total immediate tax savings could be approximately 80¢ on every dollar invested. * For details call: 668-1668 Jim Dartnell, CIM, E.C.S.1. Manager-Research or Augusto Yep F GEORGIA PACIFIC SECURITIES CORPORATD ee "Based on a subscription of $5,000 by @ qualifying B.C. resident with an ann income of aporoxiraately $35,020. 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