The following text may have been generated by Optical Character Recognition, with varying degrees of accuracy. Reader beware!

2 I 12 The Canadian Statesman, Bowmanville, Wednesday, August 17,1994 Section Two | . 4 zmm -s When the phone rings and you hear: "Congratulations ... you've just won ..." a large cash prize, a dream vacation, a home computer or whatever, whatever, beware. That so-called free prize may end up costing you a bundle. The current issue of CARPNews, the official voice of the Canadian Association Association of Retired Persons (CARP), carries a major feature warning its 170,000 readers about telephone scams. The publication reports that, incredibly, incredibly, Canadians are bilked of $100 million a year through unscrupulous unscrupulous telemarketing, and the number of phone fraud schemes is soaring. Canadians of all ages are, of course, targets, but, CARPNews reports, reports, older people are especially susceptible. susceptible. "Studies suggest that the trusting nature of many seniors makes them ideal targets. They tend to be at home during the day, and many have easily-accessible savings." Most telephone solicitations are legitimate. legitimate. In fact, they're a godsend to many people who live in rural areas, have little time to shop on their own, or are unable to get around. However, CARPNews explains, con artists are using more elaborate schemes to entice entice people to part with their cash. Canadians are bilked of $100 million a year through unscrupulous telemarketing. The "prize-giveaway" scam is a good example. "Winners" are asked, before they can collect, to pay "handling" "handling" or "processing" charges which end up far exceeding the value of the prize. "And you can't get any money back." the publication points out. "The con artists operate out-ofprovince out-ofprovince or, more typically, from the U.S." In addition, the August issue of INDEPENDENT FINANCIAL ADVICE! MYTH - All Mutual Funds invest in the stock market. WRONG - Stocks, Bonds, T-Bills, Mortgages, Foreign Equities, etc. With over 700 Mutual Funds on the market where would you to go find the one that suits you? REGAL CAPITAL PLANNERS LTD. Call Steve Scatterty Financial Advisor, Bowmanville 623-1936 W ! \ ' ■' ,v Z things in life? < Appointment at G.M. CARPNews, Canada's largest publication publication aimed at the 50-plus audience, contains a wide range of information on lobbying efforts of CARP, health and travel tips, financial and tax advice. advice. Also included are regular columns by such well-known personalities as Bob Hesketh, cooking expert Margo Oliver, personal financial authority (and CARPNews publisher) David Tafler, and tax expert Don Beach. CARP members, who must be 50 or over - retired or not - pay only $10 a year for a single or couple, also receive a variety of discounts and are eligible for special insurance and travel travel programs. On the issue of telephone fraud, CARPNews provides readers with a checklist of items on how to protect themselves: * Don't be tricked by promises of a valuable prize in return for what appears appears to be an inexpensive fee. * Check out the product, investment investment or company before you buy or invest. * If it's a one-time offer that requires requires immediate response, your answer answer should always be: "No thanks." * Don't be pressured into sending money, giving information about your bank account, or providing your credit card numbe. * Never be afraid to hang up. For membership information, or to arrange interviews with CARP President President Lillian Morgenthau or CARPNews CARPNews Publisher David Tafler, call: Carol Libman, CARP Public Relations Relations - (416) 363-8748 OR Mary Ann Freeman, Freedman and Associates -- (416) 868-1500 Thomas W. Murphy, 47, has been appointed General Director of General General Motors Service Parts Operations (GMSPO) at GM of Canada, effective effective August 1, 1994. He succeeds John F. Marcum, who moves to SPO Administration Offices, Flint, Michigan Michigan as Director of Western Field Operations. Operations. Murphy joined General Motors in 1964 as a General Motors Institute (GMI) student while working at the GM Technical Centre in Warren, Michigan and later at the Buick Motor Motor Division in Flint. Following graduation graduation from GMI he remained at Buick until 1974, when he joined the marketing staff in the former GM Parts Division in Flint. Progressing through a series of assignments, assignments, including those of District Manager in the Jacksonville, Florida sales zone and Manager of Consumer Relations, based in Flint, he was appointed- appointed- Zone Manager in Charlotte, North Carolina in 1981; Service Parts Sales Manager, GM do Brasil in 1983 and Marketing Manager, SPO International, Detroit, Michigan in 1986. In 1987 he was appointed Director, Director, Organizational Planning and Administration, Administration, Product Program Development; Development; in 1988, Director, Administration, SPO Sales and Marketing. Marketing. In 1991 he was appointed to his most recent position as Director of Western Field Operations. A native of Algonac, Michigan, Murphy holds a Bachelors degree in Engineering from GMI and a Masters degree in Business Administration from the University of Michigan. New Analyzer at Hospital Can Perform 720 Tests per Hour Mike Smith, the Technical Director of Laboratory Services at Memorial Hospital Bowmanville, is seen here with the newest piece of equipment at the hospital. The Bio-Chemistry Analyzer can do up to 720 tests per hour and eventually will save the hospital money on sending many tests to outside laboratories laboratories for results. Smith has been comparison testing the automated analyzer since mid-June and is looking looking forward to when it is brought on-line. Be Wary of Phone Scams Free Prize May Cost You a Bundle -- by Brian Costello CAPITAL GAINS PROBLEM ON REAL ESTATE Taxpayers who own real estate like cottages, rental properties, commercial real estate and second properties are going to have one major headache later this year and early next year. They are going to have to sort out their potential capital gains and decide whether to voluntarily claim them. As this is the last chance for tax free capital gains, it's an important exercise. However, it's also one that could cost you dearly in several ways. With mutual funds and stocks, the calculations are easier. With real estate they can be a nightmare. Let's say you've owned a cottage for twenty years. If you are married, you and your spouse are allowed only one principal residence between you. However, between 1971 and 1981 married couples were allowed one each. The catch is that each had to be registered properly. Couples often register properties jointly. That would mean each of you owned part of both properties and you would not qualify for this strategy. The first step then is to ask your lawyer to change the ownership of the properties. You might put the house in the husband's name and the cottage in the wife's or vice-versa. Some spouses balk at this idea feeling that one spouse might get an upper hand. Don't worry though because family law says you are still entitled to share equally in the estate. Now, you've solved your problem up to 1981 and eliminated what could have been a nasty tax problem. However, most of the appreciation probably took place after 1981 so we still have to deal with this problem. We've been given one last chance to claim up to $100,000 in tax free capital gains. And, we don't even have to sell the property. However, we do have to go through a complicated evaluation process. And, we then have to decide whether it's worth making the claim when we could lose some social benefits. For stocks and mutual funds, we compare our purchase price to the closing price on budget day (Feb. 22) in 1994. However, when it comes to real estate, we have a problem as tax free capital gains on real estate were eliminated in the February 1992 budget. To make it easier we don't have to get an appraisal for 1992 but'we will have to get one for February 1994. Once we know the value of the property in Feb. 94 we can subtract its value in 1981. Now we know our capital gain. However, now we have to factor in the fact that capital gains on real estate were eliminated in 1992. To do that we calculate the number of months we owned the property before March 1992 and compare that number to the total number of months we owned the property. In this case, of course, we would consider the months owned since the end of 1981. Effectively, the numbers go something like this. Divide 146 months into 122 months. Multiply the result times the capital gain and you will know what percentage of your capital gain is tax free. In this example 85. 6% of the capital gain would be tax free to a maximum of $100,000 if you haven't used any of your $100,000 limit. In the case of properties purchased since 1981 we would use the actual months of ownership. Those who have used some of their capital gains deduction would be restricted. Those whose cottages have not risen by $100,000 could effectively make all the appreciation tax free by claiming in this way on their next tax return. And, families who arranged their affairs properly could earn as much as $200,000 tax free by making sure both spouses participated. However, there's another problem. When you voluntarily claim these gains on your next return they will be tax free but they may trigger the alternative minimum tax and they may eliminate social benefits for the year. It may be a small price to pay to earn $100,000 or $200,000 in tax free capital gains. But, the calculations should be made to determine who should claim the capital gain if it's, interchangeable. Then we have the question of whether we sell the property to the kids. It's taxable from now on so would this be a good time to rearrange our affairs but still be guaranteed access to the property while we are alive? Should we sell it to a family trust? Should we have joint ownership to save probate fees and legal costs? These are all the things we should consider at this time. But, that's where the other problem comes in. When you add on all the considerations involving stocks, mutual funds, cottages, rental and commercial real estate and all the other investments involved you know it's going to be a busy fall for accountants, lawyers and financial planners. The longer you wait the greater the fear that you won't be able to get the information or the help you . need. ,