Ontario Community Newspapers

Waterloo Chronicle (Waterloo, On1868), 24 Jan 1996, p. 16

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you bought, plus any acquiâ€" sition or brokerage fees you paid to buy them. Don‘t forâ€" get to include the value of When you seil or redeem your mutual fund units, you may have a capital gain or loss, depending on whether the units have gone up or down in value since you bought them. The ‘sale transâ€" action is reported on a stateâ€" ment or information slip, but will not show the amount of your gain or loss unless all your transactions were made through that same company. If you purchased or sold your fund through different broâ€" kers, you will have to calcuâ€" late the amount yourself, using the account statements issued to you over the years. To calculate your capital gain or loss, add up the purâ€" chase price of all the units Capital gains attract less tax than interest income because only threeâ€"quarters of capital gains are taxable. This means that for each dollar of capital gains, 25 cents is earned taxâ€"free. As a result, highâ€"income individuâ€" als get to keep 60 cents of every dollar earned. Howâ€" ever, if a capital gains elecâ€" uon was made in regard to mutual funds owned on Febâ€" ruary 22, 1994, the gains are totally taxâ€"free to the extent that you have an "exempt gains balance". Dividends generally attract the least tax of all. This is particularly noticeâ€" able in the lowest tax bracket, where you pay less than 6 cents of each dollar in taxes. The reason for this is that dividends are paid out of a corporation‘s afterâ€"tax income. Because the corpoâ€" ration has already paid tax on the income, the investor receives a tax credit to comâ€" pensate for the tax already pard. In the lowest bracket this credit almost entirely negates the tax owing; in the higher brackets the effect is not as pronounced, but the investor still manages to hang on to more than 70 cents of every dollar earned. Selling your mutual funds * f ' i & s | g ~ & e e l in A - PTAKSUPPLEMENT j Ar mm eb t‘ ; , g Te rsonal gquide to income tax '.nvings [ Akâ€".c1r c _â€"EP.. c@®:. T mss t income attracts the highest and the selling fees from tax, no matter what tax selling price: the result : bracket you are in. In some your capital gain or loss provinces, highâ€"income indiâ€" If you made a capital viduals keep less than 50 cents of each interest dollar _ I they earn. typical tax rates paid on $1,000 of interest, capital gains and dividend income at three different income levels. As you can see, interest Mutual funds all your reâ€"invested carnings. This forms the adjusted cost base of your units. Then subtract the adjusted cost base of the units you sold and the selling fees from the selling price: the result is your capital gain or loss. LARE & aam sns ase acman w _ cab, mm'_g,zmummvm "fllmfl'w on Cns fris marmen -.:.;"-‘:m,“z,k..“'gs'..“"... se m'?"«-‘&.."’“wfia‘“mmmn"" applicable taxes. Dealer may seil for less. Limited time offer. See desier for details â€" | Ontaric FMDA, P.O. Box ce edinctecn 5t ve ue woen teven us us m nt un anuan wl we us ht ue ae is s 14 .o on w ut on munt w un w un an un age an un as w vvr-vu--'rv"-â€"--v'â€"-â€"'vv“-"l mm;xm:nunm INTRODUCING ‘96 gains election on any mutual fund units which you owned on February 22, 1994, you can shelter your gain to the extent there is an "exempt capital gains balance" still remaining. Otherwise, you must pay tax on 75% of the total gain. If you had a loss to offset other capital gains ¢ i Feasit :.3 you earn, as far back as 4 j thiee years. You can also Oe S n catry the loss forward indefiâ€" mm carriers for a nitely to apply against future R onr u,,:‘ ais m capital gains. se ho ioi > on the fund, you cannot deduct that loss from other income. But you can use it to offset other capital gains mpmapstenpame ~TUFvenmerary I /6 #1 §# y 3 rmmamnanrnonce.â€" emmamenmmuence A ROW... Morqvemern Tervomenas Bruce Street, Kitchener, NZH 6ks8 h3 mflm'r (519)578â€"6030 1â€"800â€"268â€"2628 ,‘I es w ue w un aran un an ut o0 ancue t oÂ¥ m un w0 Mnormtepminmenmnmesmee C ooo ns PE ies ‘ un atinn an w an ao Pes Tt i se We pro We gen Ins

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