north shore news

Home-based tax Savings

A reader asked about a
~--recent column in which
". Tsaid you should take
in a tenant or start a

.-; home-based business so

‘you could earn several
thousand dollars a year
tax-free.

T thought you had to
« report all income,” said the
reader. ©” .

Yes, you are right. But

Feporting the income,

u can then deduct all

‘penses that relate to the
space you rent out or use for
your ‘self Femployed sideline.

money
matters

Let’s say vou declare
$4,800 rent or business
income, then deduct $4,500
— part of the mortgage
interest or rent you pay,
property taxes, home — insur-
ance, maintenance and
repairs, and so on.

Subtract the $4,500
expenses trom the $4,800
income, declare only the
remaining $300 protit —
and, in effect, vou end up
with $4,500 “tax-free”
income,

The kev is that renting
out part of your home, or
using part of your home for
2 home business, usually enti-
tes vou to claim some of the
otherwise non-deductible
expenses you have to pay
anyway. But, warns Donna
Demers, a certified general
accountant with Demers &
Brodie: “It’s one of my pet
peeves that people assume if

they are self-employed, they

can write off teverything* —-
vou can’t, only expenses that
relate directly to earning the
income.

“And Revenue Canada is
also getting very big on what
they call the ‘reasonable
expectation of profit’ test.
“If your hobby business or
rental business doesn’t meet
this test, Revenue Canada
will disallow vour claim.”

Whether vou (or a tax
preparer) will be filing your
1997 tax return, or vou are
making plans to save tax for
1998, here are other tips
from Demers:

@ Pay cash for personal
expenses, borrow for business
or investment. “Separate the
two carefully,” she said. “If
you put up property or

Wednesday, April 1, 1998 — North Shore News — 17

iCOMPANY
| NANIE (SYMBOL)

[ransel int. Inc. (CFN)
|Canesil resources Inc. (CLZ}
(Carta Resources Ltd. (CAT)

DBA Telecom Corp. (DBA)

Ebory Gold & Gas Inc. (EGG)
iExite: Minerals Ltd. (EXM)
Gale-Bari Int. Inc. (GAB)

Glot al Metals Ltd. (GML)
Mutiplex Technologies (MPX)
Metalex Ventures Ltd. {MTX)
Powertech Industries Inc. (PWE}
Promark Soitware lac. (PRW)
RAT tat’. (Marketing) Ltd. (RAT)
Terrawest Ind. Inc. C1-A (TAW.A}
Us Platinum Inc. {UPT)

52 WK

LO/HI

0.12-225
0.25-0.55
0.11-0.45
0.11-0.37
0.09-3.05
0.31-0.65
0.03-0.35
0.30-0.84
0.16-0.90
0.40-0.85
0.50-1.15
0.02-0.17
0.11-0.55
0.15-0.60

0.17
0.35
0.20
0.15
0.19
0.44
0.04
0.35
0.26
0.43
1.00
0.11
0.15
0.25
0.21

| IR cre NORTH SHORE~BASED PUBLICLY TRADED COMPANIES

CLOSING
PRICE.

WEEK
CHATIGE

+005 T
NIC
+9.09 T
NIC
+0064
NIC
+0.01
-0.03
0.05 |
“NIC
NC
NIC
Ne.
-0.108
+0014

0.15-0.41
investments as security for a >
loan and then use the money
to go on vacation or buy a
home entertainment system,
the interest will not be.
deductible.”
M@ Pay family members
(spouse, children, elderly rel-
atives) who are in a lower tax
bracket for work they do in
your business or on your
rental property.” Pay what
you'd pay an outsider fur the
‘same work; write cheques
and document the transac-
tions.
@ When in doubt — go for
it. “Ifyou stand your
ground and your documenta-
tion is good, expense and
other claims will often be
allowed — even after an
audit,” Demers said. “It
seems auditors disallow more
than they should, just to see
where it gets them.”
‘Ifyou make a cash gift,
there are no tax conse-
quences. But if you give. real
estate or securities, there
could be a “deemed dispasi-
tion” and a taxable gain.
— Copyright 1998 Mike
Grenby :

' Closing price refers to share price at end of trading on March 27, 1998.

HECUARD Rate Watch

_ a THE RETIREMENT SPECIALISTS.

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“Rates subject to change without notice

| ite Arey 1, Guararie
ASE [tae [one ome | wT | OE
Sen neon on |
$70,920

me [sige Rates - ae RIFs. t LIFs

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NEWS photo Cindy Goodman

‘Charity choo- choo

‘Rail’s Jear Cullen, (left) presents cheques to representatives of three chari-
otalling'more than $23,000. Accepting the cheques are (left to right) Jim
Chapman on behalf of the Vancouver Sun Children’s Fund, Cathy Crockett of the
United Way. and ‘Bill Nelson for the. CKNW. Orphan's
The money was raised last year during the hol-
asthe: Royal: Hudson Steam Train was ..
d tor Christmas and-its operator earmarked:

Building better retirement & a
incomes since 1 974

Extensions are additions. to existing
power lines that'are required to
deliver electrical service to new
building or development-sites, .

_ generally along public road
allowances or rights-of-way.

April 30th is Just
Around the Corner.

Sere the Nort Shore
Smee PUGa

189 Pembertan Ave. TA TALKIN
985-71 95. lar 2-400 isis. - If you are developing a property or
: ° = constructing a new building,

residence or other facility that

requires electrical service our new
extension policy explains how your
contribution towards the cost of
providing electrical service will

be calculated.

* Will your Income Tax be ready?
_ Why not relax and /et us do it for you?

¢ FAST AND EFFICIENT ATTENTION
TO YOUR INCOME TAX RETURN

e ELECTRONIC FILING

 C.A. SUPERVISED AT NO EXTRA

The new policy, effective April 1,
1998, was developed following an
extensive public consultation process
and has been approved by the British.
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