" and sense’

READER J. R. doesn’t want -
“. to invite the taxman to the
“ party celebrating a raise.

“[ recently started a new job ata .

: higher salary — $75,000 vs. $55,000.
What can IJ do to ensure a big chunk
> of that i increase won L be eaten up. by
“taxes?” 7

-.. First off, contribute the maximum

to |a registered ‘retirement. savings -

plans “A °$6,000 contribution, for,
example, . will. save” you ‘close“‘te ;
$3,000. tax and that $6,000 can then
" grow: tax-free. Pay family members’
“in lower-tax brackets to work in the’
‘family. business/“even if it's a‘ small
‘self. -employed. sideline. Pay them to :
ork: on rental property you own.
This: shifts income from you to their
‘lower tax brackets.) : oa
‘Pay all. the household bills so the
thers © “do the |» family’s
‘saving/investing in. their lower ‘tax
brackets, If you feel comfortable with: -
the risk,.you could borrow to inyest
deducting . the loan interest and
‘saving tax: now, while deferring the
ax on the investments’ future i income
d capital gains. . us
Another reader writes: “~ m con-
fused when I read the Canadian dol-
ar is worth only 73 cents — yet at the,
ame time is trading at $1.37." — FJ.
* Talk i in terms of a Canadian doltar,

seavice ‘ To.

ati at &

3

of

: cee

and it’s worth 73 cents US. Talk in
terms of a U.S. dollar and it's worth
$1.37 Canadian. (A U.S. dollar
account cin protect you if the
Canadian dollar drops.) ’
CLR. asks, “My husband is an eco-
nomic consultant and must spend-a
lot of money on suits, jackets, ete, to

look presentable. Can he claim this is

as a business expense?”

No, such work clothing is consid-
ered personal and nén- deductible,

“T plan to retire next year and will
have accumulated 10 weeks of bonus
holiday for. which 1 will get full pay..
Can'I roll over these funds into my
RRSP?" — S.G. :

No. Only.a lump sum. retiring ||

allowance and the value of unused

sick pay may be transferred, within’ -

limits, to your RRSP. -

“T bought a rental, property two
years ago. “Can | do anything to save
; taxon the profit when [ eventually

sell the place, now there is no longer ‘”

a capital gains exemption?” — R.L.
“Try to pick a low-income/tax year
for. the’ sale. Review the strategies 1
suggested for the.reader who got a’
raise (see above), If enough money is
vat stake, consider an estate freeze —

but check this with an accountant or —

other tax expert,” '
“If I-give or lend money to my:

spouse, can she declare the com- |

pound interest?” —JW.
Yes.-Let’s: say the © $10,000

i “gitVioan earns 10%, You declare the
: $1,000 interest every year but your
ms “Spouse” can declare the’ subsequent:

interest earned: on. the “interest, —
which “will. increase each year. if
‘allowed to compound,

Mike Grenby ‘is-a North Shore: .-

based columnist. and independent

financial ‘adviser. who works with

individuals; he’ will’ answer your
questions in this column as space
allows (sorry; no individual re plies) -
write to him. cla 2444° Haywood

“Avente, West. Vancouver, BC. v7V.

fYd.:

i

| Tavconmorivey— a TSE SPECIALISTS
Lc. B.C.-A. R. A. “APPROVED CENTRE.

ALIGNMENT - ~ BALANCING - TIRES —

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“Rates subject to change without notice

For your .

RRIF Hlustration ora

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