THINKING ABOUT buying a cottage? Well, why not. With real estate prices being where they are at present, now just might be the right time. ~ By IanG. Riehl, CA Contributing Writer Under our current tax laws, any ’ capital gain on the sale of a princi- pal residence is exempt from tax. And even though you're allowed only one principal residence, the cottage could be it — and qualify _for the exemption. ~ .So if you can't afford to buy a house in the city, then a cottage .. Might fit the bill. s worth consid- -. ering. ., _ AP: you already. own a cottage . Celebrati business FOR THE past .15 years, the end of October has come to mean something special for small-sized business owners from across the country, and the Federal Business ‘D2velopment Bank. It has come to be a time when the’ Bank’ and “the” Canadian Chatnber of Commerce —- with the help of regional and local co- sponsors — have organized Small Business Week. . ; While this: one-week celebra- nm of entrepreneurship attracted thousands of small businesspeople two weeks ago, its origins are somewhat more ‘modest. > The: story begins in British . Columbia in 1979. when FBDB’s Lower. ”:Mainland.. branches : (Vancouver, North Vancouver, Richmond) pooled their resources to hold small business manage- ment: sessions, under a Small “Business Week banner. « While: the. maia reason for combining” ‘their efforts. was to. ave money, the B.C. branches _ ‘quickly realized they had struck ‘something remarkable. Smail businesspeople. were. not only interested in learning how to bet- ter manage their businesses, they wanted to meet their fellow entre- : preneurs. Also these smali busi- _ esses wanted to- attract public “attention. “The business owners wanted to ‘tell the ‘country about the impor- "tant economic benefits they pro-. ‘duce.: They wanted to tell people about the jobs they create, about :/the’ products they develop and - about the new. markets they ‘explore. Most importantly, they were anxious to tell people that small business had come of age; that they were just as committed, daring and innovative as their big " business counterparts. ..* Riding high on the success of the: 1979 experience, FBDB. staff (besides your principal residence) any gain you might make on the eventual sale could be eligible for the lifetime $100,000 capital gains exemption. Provided you owned the cottage prior to March }, 1992, you can claim at least part of any gain. Just how much you can claim depends on how long you owned the proper- ty. If you bought after that date, though, then there’s no exemption whatever. But say, you’ ve owned a cottage for several years, you may want to bump up the cost base by realizing your capital gains exemption now, through some kind of non-arm’s length transaction. ‘This could be done in several . ways. For example, by transferring to a trust for your children (if the | im in British Columbia repeated Small Business Week in 1980 and tripled the number of sessions held for local business. In 1981 the Week was adopted nationally by the Bank and endorsed by the Canadian Chamber of Commerce. . Since that time, the Bank and the Canadian Chamber : of Commerce, along with co-spon- sors in Atlantic Canada, Quebec, - Ontario, the Prairies and North West Territories, and B.C. and Yukon, organize business fairs, exhibits, workshops, conferences, luncheons, award ceremcnies and much more. Partnerships for Growth was the theme of Small Business Week ‘94. In today’s competitive, global business environment, small and medium-sized comipa- nies are finding that partnerships can be the key to unlocking new markets and achieving sustained growth. Indeed, strategic allisnces that make..use of complimentary strengths often generate a synergy and market momentum which, otherwise, would be beyond the reach of individual enterprises. Such alliances can range from long-term joint venture and part- nership agreements to project-spe- cific consortiums or — the latest trend — “virtual corporations,” which band companies together temporarily to take advantage of brief windows of opportunity. ‘Licensing and distribution agree-' ments are another common form of alliance that can ‘significantly reduce the risks small companies encounter in tackling new mar- kets. And many small businesses forge rewarding partnerships sim- ply by establishing closer, more clearly Gefined working relation- ships with major customers and suppliers. ..” Small Business Week ‘94 pro- vided Canada’s entrepreneurs with insights into how they can benefit from Partnerships for Growth. YEAR 6 9.500% 7 9.625% 8 9.750% 9 10.250% 10 11.500% AVID BLAIR ot 844-8709 gain is under $100,000) or to your spouse at an elected transfer price sufficient to give a $100,000 gain. Even so, there could be some minimum tax payable, depending on your income, or some tax on the particular portion no longer eligible for the lifetime capital gains exemption. So it’s advisable to get achartered acccuntant to help. Of course, any expenses related to the cottage, such as property taxes, utilities, mortgage interest and so on, are usually considered to be personal — therefore not tax deductible. However, if you rent the cottage for part of the year you can general- ly claim enough of the expenses to offset the rental income (which is taxable). And if you rent the cottage full time, or for a major part of the year, you may even be able to cre- ate a loss to claim against other income, thereby triggering a refund of other taxes paid. As with any real estate invest- ment, you must do a lot of home- work and research before you buy. Ideally, a cottage should be located on the water, fronting on a lake, river or inland waterway. But waterfront properties command higher prices. Also, it should be within reasonable distance of a city. Cottage prices vary widely, ranging anywhere from $40,000. to $500,000 and up. It depends on what you want, and where. By all means buy a cottage if you intend to use it a lot. But if you only want it for a couple of weeks in the sum- mer and the occasional weekend, then you’d be better off renting. Moneycare is general financial advice by Canada's chartered accountants. lan Riehl is managing partner of Riehl & Associates with a speciai interest in tax and fi finan- cial services. NO’ TICE TO CREDITORS AND CLAIMANTS of LEO - # JOHN LEWICKI and PACIFIC WESTERN PROJECTS LTD.: contact R.W. Ady, - Barrister & Solicitor «- #208, 2004 - 14th St., N. Calgary, Alberta — (403) 284-1777 The first time you see it, youll ask yourself where you've sven it before. If the sinveus curves of the hood, the rounded headlights and grace of the leaper recall the stunning Jaguars of the past, it’s because these were the inspiration. The genesis of the new XJ Series: XJ6, XJ12, Vanden Plus and supercharged XJR. The most exquisite design echoes through each model, fusing with a new gener- ation of engincer- ing and. tech- nology to deliver an extra-ordi- nary combi- nation of high performance and high comfort. 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