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ALL GOOD things must come to an end. But I hope the tax
tips you: have gieaned over the past seven weeks will be just

; vs “we wrap up ‘our sum-
tmertime series.of more than three
dozen; ways the ordinary person

:can<sgave income tax, brought to

you. by the North Shore News and
‘Thorne Ernst & Whinney,
chartered accountants.

year,. neh many of the tips

“also ‘apply: to: those with ‘higher ‘or’
: lower. incomes,”’. said Elio’ Luongo,

the: start’ “of: saving you hundreds (f not thousands) of

this year, make a $2,200 contribu-
tion. You will save about 40 per
cent tax cn this amount; on any
additional contributions, you will
save about 26 per cent.

e Nave a dependent (usually a
child under 18 or spouse) con-
tribute to an RRSP to lower net

- income and so restore some or all

of the dependent credit you claim.
© Transfer up to $6,000 of pen-

sion income from a private pension

or deferred profit-sharing plan into

doliars

. and sense

‘”.;: Because this is a summary, you
“should get more details — and

possibly expert advice — to decide
whether these strategies are tight
for you.

* Contribute. to a spousal regis-
-tered retirement savings plan. The

 eontributor gets the deduction, the

spouse (ideally, in % lower tax
bracket) declares the RRSP money
when it comes out as income (but
remember the “three-year rule’’).
Also, the spouse, who might not

_ have other pension income, will

then. be able to use the RRSP to
buy an annuity or RRIF to create
pension income to claim the pen-
sicn tax credit.. ©
© Contribute’. to an RRSP to
lower (family) net income ta. quali-
fy for the refundable tax. credits -—
like the child tax credit.
¢ Use, RRSP . contributions to
control your tax Tate. For example,
if your taxable income is $30,000

Mike Grenby

your spouse’s RRSP (under the
‘proposed new rules). You get the
tax break now, and ycur spouse
could benefit later (see the first tip
above).

® Contribute qualifying invest-
ments (like stocks) with accrued

‘capital gains to your or your

spouse’s seif-directed RRSP. You
get a deduction equal to the fair
market value of the investrient and
trigger a capital gain. Offset this
gain with the capital gains exemp-

’ tion (but consider the effect of any

CNIL — cumulative net invest-
ment !oss). If you have used up the
exemption, declare only 66% per
cent of the gain this year instead of
75 per cent next year.

© When you start a new business

‘as a sole proprietor, choose your

business ‘year-end carefully (it
doesn’t have to be Dec. 31). For
example, if Jan. 31, 1990, will be
your year-end, you will declare

your income in the 1999 tax year.
So even though you earn most of
the income in 1989, you won’t
have to pay tax uatil April 30,
1991,
® Small business corporations pay
about 23 per cent tax cn the first
$200,000 of active income. Above
that level, tax is about 45 per cent.
So consider paying out bonuses to
shareholders to reduce the com-
pany’s income to $200,000.

® Incorporating a small business
could give you the special low rate
of tax (see previous tip) and the
enhanced small business deduction
— as well as many other tax-saving
opportunities. Get expert advice.

@ When you sell the shares of a
small business corporation, you

might be able to claim up.io a-

$500,006 capital gains exemption
(the limit on almost all other in-
vestments was reduced to

 , $100,000). Again, get advice well

before you plan such a sale to
make sure your company qualifies
for this enriched exemption.

© If you drive a car for business,
keep a log to record that business
use. If you get a car allowance,

‘make sure it’s reasonable and bas-

ed on the distance travelled.
Otherwise, you could be taxed on
tke entire aiiowaace.

© Challenge Revenue Canada if
it disallows deductions or credits
you have claimed — provided you
(or your. adviser) can base the

Royal Trust presents prize

ROYAL TRUST‘S North Van- .

couver Branch has awarded an

“IBM Personal System/2 computer

to Mark Wheeler of Vancouver as
part of a nation wide: sweepstakes
draw.

The contest, which ran from
January 2 to March 1, was part of
a “customer appreciation pro-
gram’’ held in every Royal Trust

‘branch across Canada. To be eli-

gible, customers visited a branch
and filled out a ballot for the ran-
dom draw.

“In today’ s' marketplace you
need to offer clients more than just:
good rates,”’ said branch manager,
Debra Terry. ‘‘You need excellent

RECYCLE THIS
NEWSPAPER

service, solid advice and targeted
promotions. We know our winners
will appreciate and value their IBM
computer.’”

The IBM PS/2 Model 25 is one
of the newer models and is consid-
ered ideal for home, school or
business.

You’re Invited ...

to be your best! At Sun Life we train people to be
their best..And by being their best, our people make
us Canada’s strongest life insurance company.

Te find cut more about an exciting career
opportunity with a leader in the financial services
industry, why not attend a

‘Career Discovery Seminar’

Tuesday, August 22nd, 6-8 p.m.
' Metrotown Place, Suite 1206
4330 Kingsway, Burnaby

Invitation by reservation only
call Doreen Gregson at 430-0455

The Strength of The Sun
is its People

‘SunLife |

Sunetco
SUN LIFE DISTRIBUTION SERVICES INC.
MUTUAL FUNDS DEALER

- BUSINESS _

challenge on sound tax planning
principles. In fact, whenever you
atrange your affairs to minimize
tax, ask vourself: ‘How will I de-
fend this stragegy if Revenue
Canada questions it or audits me?
Document your xeasons in case
you need them in the future.

a tips can save you thousands

Canada. Although ke also works
as an independent financial ad-
viser, Mike wili respond to readers’
questions and story ideas througi:
the paper.

Write to Mike Grenby, Money
Columnist, North Shore News,
1139 Lonsdale, North Vancouver

V7M 2H4. Mike cannot reply in-
dividually but will answer as many
of your letters as possible in his
column.

Based locally, Mike Grenby
writes a money column which ap-
pears in newspapers across

INVESTMENT CERTIFICATES |
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90-179 DAYS
30-44 DAYS 11% 1 YEAR
oa - 2 YEARS 10% %

| MEMBER CANADA DEPOSIT INSURANCE CORPORATION
Ask about our monthly interest cheques. For further information:

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NEW BRANCHES OPENING SOON:

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ALL RATES SUBJECT TO CHANGE WITHOUT NOTICE

IMPORTANT INFORMATION
FOR INVESTORS —

If you purchase an interest in a tax shelter after
August 31, 1989, you must include the tax sheiter
identification number in your income tax return in-

the year you make a claim for a loss or deduction...
arising from the shelier. If the number is not
provided, the loss or deduction claimed will be
disallowed. The identification number is assigned :

to the promoter for a particular tax shelter. *

Generally a tax shelter for tax purposes is any
property which is expected to produce losses or
deductions for-an investor in excess of its actual cost
to the investor. The relevant losses or deductions
are those expected to be incurred within four years
of the date of acquisition of the property.

The identification number in no way represents
a confirmation by Revenue Canada of the
validity of the shelter. An investor should
receive an information slip, T5003, for the first year
of the tax shelter and should file it together with
documentation necessary to support the loss or
deduction claimed. Form T5004, ‘‘Statément of Tax
. Sheiter Loss or Deduction’ will be available at all
district taxation offices and should be used to provide
your identification number to Revenue Canada Taxa-
tion upon filing your income tax return.

For further information contact your local district

taxation office or refer to information circular 89-4,
**Tax Shelter Reporting.’’

Revenue Canada

Canad't

ne

Revenu Canada
Impét .