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p6 tribune february 15 1995 money talics capital gains election can help shelter mutual fond profits from taxation many investors jumped on the mutual fund bandwagon in the early 90s enticed by the prospect of higher earnings than were gener ally available elsewhere some just as quick ly jumped off when the ride got bumpy and switched their money back to safer more pre dictable investments however a good many investors hung on if you are one of those and you were lucky enough to have entered the market before it heated up you may have unrealized capital gains in your mutual fund accounts if you have not used up your capital gains exemption you can use the capital gains election to shelter these accrued gains from tax taxation of mutual funds most mutual funds are organized as trusts which means that income earned by the fund is flowed through to the investor and report ed yearly on an information slip you may receive various types of income from a mutu al fund interest from money on deposit or invested in interestbearing investments div idends from stock owned by the fund or capi tal gains from the buying and selling of stocks and other securities by the fund itself this income is paid to the investor in cash or more frequently is reinvested in the fund to buy more units these transactions are easy to handle taxwise as the information slips summarize each of the various types of income for the year things are more complicated when you actu ally sell or redeem the fund units themselves the units may have gone up or down in value since you bought them resulting in a capital gain or loss this gain or loss is not reported why wait for your income tax refund when you can get cash back fast if you qualify you can get your refund within days back its fast its easy 20 freel lane behind go station stouffville 6422927 65 brock rd uxbridge 8527409 rrsp smart investors rrsp smarter its smart to invest in an rrsp but choosing the right one can be confusing im an investors group representative ill help you find the rrsp that best fits your needs on a slip but must be calculated using the account statements issued by the fund over the years to do this add up the purchase price of all the units you bought plus any acquisition or brokerage fees you paid to buy them dont forget to include the value of all your reinvested earnings this forms the adjusted cost base of your units calculate your capital gain or loss by subtracting the adjusted cost base of the units you sold and the selling fees from the selling price making the election if you own mutual fund units which have increased in value as of february 221994 you can shelter the accrued gain by making the capital gains election to do this calculate the accrued gain as of february 22 1994 using the method explained above for exam ple assume you paid 10000 to buy 1000 units in 1993 and paid an additional 100 in acquisition fees assume that you reinvested your 1993 earnings of 1500 to buy an addi tional 140 units your adjusted cost base is now 11600 for 1140 units if your units were worth 12800 on february 22 1994 you had an accrued gain of 1200 you can shelter this amount from tax by making an election and designating 12800 as your elected proceeds to trigger a capital gain of 1200 you can then use your capital gains exemp tion to shelter the amount from tax the effect of the election however does not increase the adjusted cost base of the units as it does for shares instead the sheltered gains go into a pool called the exempt capital gains balance this pool can be used to shelter any future capital gains arising from the mutual fund up until the year 2004 whether by way of t3 distrib ution or from actually selling units of the fund itself to continue out this example if the fund distributes capital gains of 300 in 1995 these can be sheltered from income by using 300 of the exempt capital gains balance reducing it to 900 then in 1996 if you dispose of half the units and realize a capital gain of 500 this too can be sheltered from income reducing the exempt capital gains balance to 400 this continues until your exempt gains balance is zero or until the year 2004 whichever comes first if you ever sell any of the units at a loss the exempt capital gains bal ance is not affected however once all the units of the fund are dis posed of the exempt capital gains balance is deemed to be nil even if it has not all been used up there is no way to recapture the balance or to use it against gains from other sources a if you invested in more than one mutual fund you will have a sepa rate exempt capital gains balance for each one this means you will have to set up a good recordkeep ing system to keep track of your various accounts and balances rrsp mutual funds you cannot make an election with regard to any mutual funds held inside an rrsp as all income earned inside the rrsp is already exempt from tax a mutual fund is similar to any other rrsp invest ment vehicle in that all contribu tions and earnings are taxfree until withdrawn this is one in a series of arti cles dealing with tax matters the articles are written by hr block canada inc canadas largest tax service st obituary call donna painter bus 905 7378966 ext250 res 905 6493417 to find out more about investors group and ou rfls wsj investors rrsps onestop shopping gics bankstrust companies mutual funds self directed rrsps ttj money m concepts lyj the money management people 6424540 fc its not what you earn its what you keep accounting tax return preparation for farms small businesses corporations efiling at no extra charge new business planning and startup financial estate planning personal confidential service experienced courteous staff free initial consultation evening weekend appointments available shepherd powell chartered accountants 250 queen street port perry next to the big v 905 9859791 fax 905 98541 03 watson a respected educator stouffville education legend cedric watson has died in his 100th year watson who from the age of 17 through his retirement at the age of 60 was lead teacher and then principal at stouf fville public school died feb 5 at his residence at parkview home a respected mathematics and grammar instructor watson wrote a mathematics work book which was used by grades 7 and 8 students he was noted for his disciplinari an approach to education during his 43 years at the local school now called sum- mitview public school according to lome boad- way who took over as princi pal when watson retired in 1955 his predecessor was a respected educator who believed in the drill system of learning he sure knew his acade mics and he was very well respected by parents they felt that if anyone was going to lead their children into entrance tests to high school cedric would said boadway who was a student of watsons in grade 8 at the stouffville school boadway said watson avoided the limelight and wanted to be left alone to run the school his way he stayed pretty much to himself and he resented out side interference from the home and school association i think the stouffville public school board respected cedric enough that they left him on his own watson also had a slightly eccentric nature said boad- way he would have his students do writing exercises to the beat of old records played on his gramophone which he would run to the front of the class and wind up as it slowed down born and raised in the goodwood area watson con- tinued to live with his brother carl now deceased on ninth line s until well after his retirement he lived on his own until takingup residence at parkview home in july 1993 he is survived by a cousin herb hoover of auiston service and committal was at oneill funeral home feb 9 watson will be buried at the goodwood cemetery this spring people 0 a co 03 o brooks committed to helping diabetes osteoporosis patients bruce brooks chief of internal medicine at markham stouffville hospital considers himself very for tunate to be associated with the facility brooks is proud of the wide range of specialties and subspecialties offered at the hospital we have representatives of just about every subspecialty including a respirolo- gist infectious diseases expert car diologist neurologist rheumatolo- gist oncologist gastroenterologist and endocrinologist which is my specialty for a hospital of this size were very lucky to have all these areas covered his own area of expertise covers two diseases which affect large numbers of people diabetes and osteoporosis there are two types of diabetes and the adult onset type is called type ii explained brooks its the egssssssq 5 t harold hoover rmt registered massage therapist stress relief acute chronic pains headaches sports injuries stouffville chiropractic centre 6096 main street 905 6403562 f lvwygsb 103562 stouffville district secondary school notice to parents term 1 report cards distributed thursday feb 16 parents night tuesday february 21 700900 pm subject selection for 1 99596 course work march 8 1995 alan dickson 6401433 jay hooper principal fax 6401475 viceprincipal town of whitchurchstouffville town of whitchurchstouffville 1995 interim tax bills 1st instalment due february 17 1995 2nd instalment due may 19 1995 interim tax bills have now been mailed ratepayers who have not received their bills should make immediate application to the municipal tax department the penalty charged for nonpayment of 1 995 taxes is one and onequarter 114 percent imposed on the first day of default and on the first day of each month thereafter failure to receive a tax bill does not eliminate the responsibility for payment of taxes nor the penalty charges for later payment tax payments may be made by mail or in person at the town office and at the following ci8c locations stouffville 6311 main street aurora 15195 yonge street newmarket yonge davis drive bank payments are to be made to a cibc teller only during regular business hours payments will not and cannot be accepted through the instant banking machines i banking fees may apply town office hours mondayto friday 830 am to 430 pm 6401900 8952423 box 419 19 civic avenue stouffville ont l4a 7z6 after hours mail slot east side of building ruth armstrong amct cmtc tax collector type which is increasing in incidence and worldwide its almost consid ered to be an epidemic the reason he said is that the dis- i ease is environmentally induced by such factors as diet weight and- lifestyle although diabetes has a tendency to run in families people- can minimize the risk by watching their weight and modifying their diet yfi type ii diabetes is controllable f with diet weight reduction and- j exercise most patients can get their i blood sugars back to the normal range brooks advised 5 the biggest fear among patients is that they will be affected by long- term complications such as blind- ness heart and kidney disease andt neuropathy a condition which is i characterized by loss of sensation in the feet i however recent north american 5 trials of type i or insulindependent diabetes snowed that bringing blood sugar to acceptable levels produced a reduction in the progression of all complications by 50 to 70 per cent over 10 years that gives diabetics a great deal of hope that if they do put in the effortf to control itj there will be real bene- fits to them 3 type 1 usually surfaces in child- rt hood although it can start as late as the early 30s said brooks we dont 1 actually know the cause ofit but there is a genetic predisposition for development of the disease and we think there may be an environment tal trigger a recent study at the toronto hos pital for sick children gave rise to concerns that the introduction of cows milk into the diet at an early age may be a contributing factor for people who have a predisposition to diabetes as a result doctors are recom- mending that mothers with a family history of the disease should breast- feed their babies for a longer period of time said brooks osteoporosis or loss of bone densis ty is a disease closely associated it with postmenopausal women the j most bone mass you will ever have in your life peaks at around 25 said brooks from there you lose about point three per cent per year of bone densi- j ty the problem is when women i reach menopause the percentage of loss accelerates to two per cent per i year for seven years and then goes back to the previous rate for the rest of your life as a result many older women ji have brittle bones and the risk of j fractures and resulting complica- jj tions increases dramatically in a way its a silent killer if brooks observed adding that estro- j gen replacement therapy has proved to be highly effective in slowing down- j the loss of bone density estrogen is an insurance policy to keep calcium in your bones longer i and probably one of its major bene- fits is the prevention of osteoporosis 2 the other benefit is a reduction in j the incidence of coronary artery dis- ease most women who take estrogen j also feel better all women should check with their family doctor to see whether they are a candidate for treatment he suggested j as for concerns about increased j risk of breast and uterine cancer i there has been no conclusive evi- j dence either way j a lot of women dont want to go on estrogen replacement because they think theyre going to have periods j but that doesnt have to be the case i factors which can contribute to the disease are smoking lack of exercise j anorexia and early menopause a diet rich in calcium and vitamin i d with calcium supplements if nee- i essary is very important a new drug editronate has proved j effective in stimulating calcium pro- duction to increase bone mass by five to 10 per cent said brooks