PROVIDED HOME IS PAiD GFF WITHIN TEN VEARS

Mortgage still attractive for over 65ers

THE ENVELOPES, please, so I can announce the winners
in the following categories: mortgages, investments, gifts
and Icans, housing, family allowances and income tax sav-

ings.

I'm a retired art teacher with a
livable income and some extra
money to invest or buy a home. I
still work as an artist and my bank
manpager says i can take out 2
mortgage. Siuuld | buy a place
rather than rent?*? — V.C.

dollars
and sense
Michael Grenb ry

Yes — provided you will live in
your home at least five years and
ideally 10 years or more. Tliat
allows you to (1) average your
buying and selling costs over a
longer period and (2) wait out any
dip in real estate values that might
occur,

Owning enables you to benefit
from the tax-free increase in a
home’s value, a trend history sug-
gests is likely to occur over the
long term. .

bess snranrerrt

1 CAN

However, make sure you will
have enough income to enjoy ‘ife;
don’t tie up everything in the
home. And if you do take out a
mortgage, make sure it’s small
enough so you can pay it off in
five to 10 years without financial
strain.

On the other hand, consider ren-
ting if you move frequently, pay
very low rent (and expect that to
continue into the indefinite
future), can afford rent increases
and can cope with having to move
if your building is converted to
condominiums, for exarnple.

“3¢ family allowance payments
are put into mutual funds in the
child’s name, can the child report
the dividends?” — G.C.

Yes, this approach works for
any investment purchased with the
family allowance or other funds
earned or inherited by the child.

“My mother would like io give
me part of my inheritance now to
avoid death taxes. How does this
work?”’ — E.S.

There are no death or gift taxes
in Canada (at the moment). How-
ever, a gift could trigger income
tax.

If your mother gives you stocks
or revenue property, for example,
a deemed disposition takes place.
She would then have to report the
difference in price between the
time she acquired these invest-
ments (or, if she’s a widow,
possibly from the time her late
husband acquired the investments)
and the date of the gift. With capi-
tal gains (profits), she might be
able to claim an offsetting capital

I'm an Investors professional financial
planner. It's my job to help you create
and follow a personal! financial plan.

l can help with:
e Investment Funds

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e R.R.S.P.s
e Estate Planning

JEFF ARNOLD
682-5431

GWESCO.

How to Avoid Being “RIPPED OFF”
A “Must” Seminar for Small Business People

Donald W. Reid lb, Arm

© Lawyer

© Former Corporate Executive
® Retired Director Toastmasters

International

¢ Experienced COLLECTOR

assisted by Howard G. Score, PEng.

WILL GIVE A ONE DAY SEMINAR
9am. -4 pm. — Wed., Oct. 18, 1989
c

heon included
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1025 Marine Drive, North Vancouver, B.C.

SUBJECTS:

Business Deals — The best ways to be sure you get paid
a) Dealing with John Doe or Jane Smith personally.
&) Protecting yourself from the private corporation.
¢} Protecting yourself from the large corporation.
) Emotions — disputes and diversions.

Disputes —

How to resolve them — When all else fails

a) Collection Agencies and mediators
The legal system — when does it help?
au

Bankruprcies — what they reall are!

6)
Gp Builders Liens — the goud and the

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gains exemption. If your mother
gives you cash, there are no tax
consequences.

“You suggested giving or len-
ding money to adult children as a
way to save tax. But Revenue
Canada says I can’t deduct these
amounts. What did you mezn?*’
— AS.

Such gifts or loans simply lower
your savings and investments. You
have less money which produces
less investment income, so you pay
less tax.

This approach makes sense oniy
if the children could then receive a
greater personal and/or financial
benefit so there is a net gain for
your family as a whole.

“How do I go about learning
about the stock market?’' — M.S.

Buy or borrow books on stock
market investing for beginners.
Attend courses offered by
stockbrokers or through adult

35 - Wednesday, October 11, 1989 - North Shore News

education programs.

Perhaps create a $10,000 port-
folio on paper, writing down your
“buys’’ and ‘‘sells’’ and following
prices in the newspaper. Perhaps
buy some mutual funds, reading
their reports and following their
prices.

You might join an investment
club, pooling your money and tak-
ing part in its management as a
learning process.

“I cashed some RRSPs and tax
was withheld. Now I’m going to
have to declare the total amounts
on my 1989 tax return and pay tax
again. Why am I taxed twice?’’ —
S.P.

You aren't. Simply deduct the
tax already withheld from the
amount you owe — just like an
employee who declares his or her
total income for the year, works
out the total tax and then deducts
the tax that has already been

withheld by the employer.

“Do FE pay down my 10.5 per
cent mortgage with $20,000 I
received when I separated from my
husband, cr do I put the money
into mutual funds?*’ — V.S.

If you are sure (or willing to
gamble) that your money will grow
by at least 10.5 per cent a year —
after tax — then choose the mutual
funds. Otherwise, pay down the
mortgage. Or you might put half
the money into the mortgage and
half into mutual funds.

“EF t borrow to invest in revenue
Property, can I deduct my interest
costs? Should E borrow against my
own home plus the rental place to
come u with the purchase price?”

You may deduct your interest
costs against the income; ask Rev-
enue Canada for its rental income

See Interest
Page 36

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