SARA OLE KE WG

TAKE A lesson in saving
tax from the folks at

' Revenue Canada - in partic-
ular, the 12 who recently.
split a $2.5 million Lotto
6/49 jackpot.

“Getting a windéall like this is
one of the few remaining ways to
make money and not have to pay
any tax,” says Ina McMillan, dis-
trict office communications divi-
sion chief. “And because many of
the winners paid off mortgages

_ and other debts and also spent

“ some of the money, again they

’ didn’t face any income tax bills.”

For the past six years, as many
as 12 present and past employees
.of McMiltan’s public affairs divi-
sion have been putting $2 each

. Wednesday. into a lottery pool.

. “When Usaw we'd won, I told -
. the office that Monday I'd be in a
little late," said Grant Inglis, 40,
who runs the pool.

That morning Inglis confirmed
the figures at the lottery retailer
where he’d bought the tickets:
“Once! got to work I started to

- phone. the others — but the word

‘ spread almost faster than I could
“call.” Inglis took a list of the win-
‘ners’ names and addresses to the
lottery office to cash the ticket.
“The cheque was paid to him in
“trust and his bank then issued 12
“bank drafts for $208,327 (after
deducting its service charge). ©

“I don’t think anybody slept
that night,” said McMillan, who

as been with Revenue Canada for

32 years.:“1 know ‘my husband and
I-were making coffee at 4 a.m.

nd reading the paper at.5 a.m.”

: McMillan added that she plans to
spend some.of the money on horae
improvements and invest the rest

S "our nest egg."

Dave Morgan, ‘public affairs ,
officer, used his winnings to pay
off a $3, 000 car loan, a 31, 600 .

Westet gets long- -distance fee

FASE AIA

SE EW SAE tees

credit card debt and a $125,000
mortgage. (Since the mortgage
rate was 11.25%, the winnings
gave Morgan, 37, and his wite
Theresa. 31, a nurse, an effective,
after-tax return of 11.25% — the
same as putting the money into a

DOLLARS AND SENSE

guaranteed investment paying
19% interest before tax.) ;

“We celebrated with a meal out
and I had two deluxe cheeseburg-
ers instead of one,” Morgan said.
“The only luxury we bought was a
$1,600 camcorder.”

~The Morgans, who have two
young boys, are selling their
townhouse and plan to buy anoth-
er home: “We'll end up with
another mortgage of about
$115,000 but our new place will
be worth almost twice what we
have now.” Morgan reasoned. He
also topped up his RRSP contribu-
tion.

Inglis, an access and privacy
officer, had won $150,000 in the
lottery, ‘seven years ago and used
that money to buy a house. He put
his latest winnings into short-term

BN PTY ART

deposits until he can review
longer-term options. “And I'm
ilso shopping around fora
Caribbean cruise.” he added.

Winners or not, we'll all have
to deal with filing a tax return for
this year. Expect your personal-
ized 1994 return in the mail
between mid-December (Merry
Christmas!) and mid-January.

Changes include:

° A four-part capital
gains/losses schedule three. This
ties in with the elimination of the
capital gains exemption while still
allowing you to make a “last
chance™ special clection to claim
the exemption without selling
your investment. You'll also need
a form to make this claim; look
for it around the end of the vear.

* The medical expenses sched-
ule four has been dropped. You
simply total the qualify ing
amounts and attach receipts.

¢ Use the new schedule seven
to show eligible transfers to an
RRSP and, more importantly, to
record RRSP contributions you
have made but not claimed. This
will help track an over-contribu-
tion or a normal contribution you
made but chose to carry forward
to claim in a higher-income year
for the higher tax break (under °

* present rules).

* You start to lose the age
amount once your net income
exceeds $25,921. So plan now to
claim every possible deduction
listed ahead of line 234 (refer to -
your 1993 tax return).

° Your federal tax credit jumps
to 29% from 17% on charitable
donations above $200, so group
donations to maximize the amount
above that threshold.

Mike Grenby is a North Shore-
based columnist and independent

ling

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