Edmonton Real Estate Blog

Not all debt is created equal. Interest expenses incurred for the purchase of non-registered income generating investments are generally tax deductible. Interest on loans to purchase personal assets, pay personal income taxes or buy your home, however, are not. What is Debt Swapping? Essentially, it is converting non-deductible debt into deductible debt. How? Sell your non-registered assets to pay off your non-deductible debt. Next, take out a line of credit to repurchase non-registered securities and deduct the interest! Your after-tax cash flow increases, but your overall level of debt remains the same.

Assumptions:
• Under current income tax legislation, case law and CRA assessing policy, interest incurred on money borrowed to purchase non-registered income-producing investments is tax deductible. Income for the purposes of the
Income Tax Act (Canada) does not include capital gains. Further restrictions on the deduction of interest apply in the Province of Québec.
• Taxable capital gains may be realized when selling investments.
• Capital losses realized on a disposition may not be fully deductible if the same non-registered investments are purchased within a period that begins 30 days prior to their disposition and ends 30 days after the disposition.
• Individuals must qualify for a line of credit/investment loan.
• Lump-sum payments on a mortgage may incur penalties.
• The after-tax cost of borrowing on the Line of Credit (investment loan) must be less than the before-tax interest
charged on the mortgage loan and car loan for this strategy to be effective.
• The CRA has commented positively on the implementation of basic debt swap transactions; however, the CRA is not legally bound by their policy statements. In some circumstances, particularly those involving transactions between non-arm’s length parties, the CRA may consider debt swap transactions a misuse of the Income Act and apply the General Anti-Avoidance Rule to deny any resulting tax benefits. We recommend that clients discuss this matter with their accounting or legal advisor if they have concerns.

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They say you can’t make up for lost time but that’s not necessarily the case with contributions to your Registered Retirement Savings Plan (RRSP). Canadians are allowed to carry forward unused RRSP contribution room until the age of 71. So, if you didn’t maximize your RRSP contributions in past years, you can still take advantage of the opportunity to invest more than your annual contribution limit this year, make up for shortfalls in past years and take advantage of a large tax deduction, all at the same time. Maximizing your RRSP contributions is one of the best strategies to build the retirement you deserve and dream of.

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Perfect starter or investment property. 3 Bedroom townhouse, 1.5 bath. Ideally located close to schools, playgrounds, Rundle Park. Upper level has 2 large bedrooms and a 4 pce bath. The basement has a large master bedroom and a 2 pce bath.  Newer hot water tank and furnace. It has it own private fenced yard in the front. All the windows have been recently replaced and all the fences have just been repainted. This is a great bargain so don’t miss out. *For more information visit realtor’s website*.

Click here to view more info and photos:

To View & Search All MLS Listed Houses for Sale Visit Us At:www.EdmontonHomesforSale.biz

Perfect starter or investment property. 3 Bedroom townhouse, 1.5 bath. Ideally located close to schools, playgrounds, Rundle Park. Upper level has 2 large bedrooms and a 4 pce bath. The basement has a large master bedroom and a 2 pce bath.  Newer hot water tank and furnace. It has it own private fenced yard in the front. All the windows have been recently replaced and all the fences have just been repainted. This is a great bargain so don’t miss out. *For more information visit realtor’s website*.

Click here to view more info and photos:

Financial life planning gets to the heart of the matter by reviewing your finances in relation to the rest of your life. This process connects the disciplines of financial planning with your life in order to develop a customized plan that is best-suited to your needs, goals, and aspirations. By taking into account your current financial situation and looking at it in the context of where you’ve been, where you are now, how you got here and where you’d like to go, financial planning gets brought to life, your life – to provide you with the best possible financial plan.

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Perfect starter or investment property and now just $139,900! 3 Bedroom townhouse, 1.5 bath. Ideally located close to schools, playgrounds, Rundle Park. Upper level has 2 large bedrooms and a 4 pce bath. The basement has a large master bedroom and a 2 pce bath.  Newer hot water tank and furnace. It has it own private fenced yard in the front. All the windows have been recently replaced and all the fences have just been repainted. This is a great bargain so don’t miss out. *For more information visit realtor’s website*.

Click here to view more info and photos.

History shows that the relative performance of various sectors changes from year to year. More importantly, these changes are not predictable. That’s why an investor’s biggest ally is staying invested and diversifying according to their comfort level with market volatility. The chart reinforces this strategy by illustrating that sectors that are among the best one year could be among the worst the next. By diversifying across different sectors and not trying to time the next hot trend, investors can offset risks and reduce volatility by balancing exposure in both positive and negative market environments.

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For the most part, RRSP concepts and facts are easy to understand: You regularly contribute to RRSP-eligible investments, the accumulating investment amounts are tax-deductible and tax-sheltered until you make withdrawals in retirement, and you enjoy the considerable benefits of compound growth over the longer term. Those RRSP facts are plain and simple but here are a few lesser known facts that will help you get the most from your RRSP eligible investments.

The Home Buyer’s Plan allows you to borrow from investments held in your RRSP for the purchase of your first home. You and your spouse can each borrow up to $25,000 but you can only participate in the program once and you must repay investments held in your RRSP over the next fifteen years or you’ll pay tax on any amounts not repaid.

The Lifelong Learning Plan makes it possible for you to use funds held within your RRSP to pay for training or education. If you qualify, you can withdraw up to $10,000 in a calendar year with the total withdrawal amount capped at $20,000 over a maximum of four consecutive years. You must repay within ten years to avoid penalties.

If you cease to be a resident of Canada you can still make contributions to your RRSP eligible investments using only Canadian-source earned income to calculate your contribution limit. There is a 25% withholding tax for payments to non-residents from investments held within a RRSP or RRIF but you can transfer qualifying lump-sum pension benefits or retirement allowances directly into your RRSP eligible investments without paying the withholding tax. You can also transfer funds between investments held within RRSPs without incurring a tax penalty.

In the year you turn 71 you must wind up your RRSP and take the cash, purchase an annuity or transfer the money to RRIF eligible investments, from which you will be required to withdraw annual amounts based on your age. If you are not earning much income, it might be more advantageous to start making withdrawals from your investments held within a RRSP/RRIF prior to age 71 to smooth out your taxable income in later years. After age 71, you can no longer make contributions to RRSP eligible investments for yourself but if your spouse is under age 71, you can still make contributions on their behalf.

Knowing the facts about RRSPs and RRIFs and using the right strategies will help ensure you can realize all your retirement dreams. You can get the right RRSP (and all other financial) facts and strategies from your professional advisor.

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

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Reduced $10,000 for a quick sale!

Perfect starter or investment property. 3 Bedroom townhouse, 1.5 bath. Ideally located close to schools, playgrounds, Rundle Park. Upper level has 2 large bedrooms and a 4 pce bath. The basement has a large master bedroom and a 2 pce bath.  Newer hot water tank and furnace. It has it own private fenced yard in the front. All the windows have been recently replaced and all the fences have just been repainted. This is a great bargain so don’t miss out. *For more information visit realtor’s website*.

Click here to view more info and pictures or call today to view in person 780-634-8151

To View & Search All MLS Listed Houses for Sale Visit Us At:

www.EdmontonHomesforSale.biz

Since 1956, the S&P/TSX has delivered an annualized return of 9.16% and has proven to be resilient through the worst market conditions. Market volatility is a regular occurrence of investing. Over the same period of time there have been many instances when the TSX declined by more than 10%. Each time, the market recovered and achieved new ground. Staying the course is of the utmost importance during periods of volatility as it ensures investors are able to fully recover from these periods and achieve their long term investment goals.

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