Tax shelter investments.

[XXXmen]

I would like to know if there is such a thing. I don't mean RRSP's but is there any other form of investment using some type of tax shelter??

Does anyone have any ideas.

[15-20_God]

do you mean investing in limited partnerships?

[Thalo]

The socialist provinces (all of them except Alberta) seem to be quite supportive of LSVCCs. Gets really good tax treatment but do you really want to support unionized labour?

There's a play on natural resource exploration companies that someone once explained to me but I forgot the details about that kind of shelters your income from taxes.

[Capt.]

For tax breaks, you can invest in things that are still eligible for the lifetime capital gains exemption, ie. certain farming things and qualified Canadian controlled private corporations

[fl4wless]

i hear you can get big tax breaks purchasing business losses...anyone heard of that?

[XXXmen]

Sorry, it's going off topic, but I meant for personal income tax. Can you not contribute to like a charity like AIDS charity, you get a return of say 110% essentially lowering your taxable income. Is this possible and is there a set amount allowed?? Does anyone know how this works??? Does it make financial sense to do this???

[pitz]

Sorry, it's going off topic, but I meant for personal income tax. Can you not contribute to like a charity like AIDS charity, you get a return of say 110% essentially lowering your taxable income. Is this possible and is there a set amount allowed?? Does anyone know how this works??? Does it make financial sense to do this???

These 'buy low, donate high' sorts of schemes have been mostly ruled illegal. And the ones that haven't, are being challenged by the CRA.

There are 'flow-through' shares that are often decent tax shelters, but you have to make sure the promoter is reputable. They carry a high degree of risk.

If you have significant assets, a good tax shelter, overall, is borrowing to invest. For instance, you can borrow at 6%, invest in the Canadian stock market that traditionally has returned 10-12%/year, and use the 6% interest you pay as a tax deduction. Most of the returns from the stock market will be in the form of tax-deferred capital gains, while interest is deductible against income at full income rates, on a yearly basis.

[pitz]

i hear you can get big tax breaks purchasing business losses...anyone heard of that?

Well basically the idea is that you purchase a failed business, combine it with your own, and use the tax losses in the failed business to offset the gains in your business.

The idea is that a failed business might have a lot of tax losses, but without gains, the owner of the failed business has no way of monetizing the asset (the tax losses). Hence they sell the losses at a discount to a successful business.

My broker did pitch me on a packaged/unitized product that individuals could use to offset capital gains a few years back. Basically the same idea, but it was in a form that an individual could use.

[Ferman]

I personally use flowthough LPs to greatly reduce my income tax burden.

Basically, you can lose close to 25% of your investment (in AB, more if your in Ont), and just break even if your at the highest marginal rates.

[Atomic Chip]

I don't mean RRSP's but is there any other form of investment using some type of tax shelter?? Does anyone have any ideas.

Buy a house, live in it, then sell.

Subject to certain conditions, generally speaking you incur no capital gains tax on the profit (if any) from the disposal of your primary residence.

[ggs]

Buy a house, live in it, then sell.

Subject to certain conditions, generally speaking you incur no capital gains tax on the profit (if any) from the disposal of your primary residence.

that cant be too convenient moving from house to house.

and im pretty sure if you pull that a few times they'll start to get suspicious.

[Wylliecoyote]

i hear you can get big tax breaks purchasing business losses...anyone heard of that?

I do believe business losses that accompany a purchased business can only be deducted by the new owner against income from that business or a business they own in the same industry, but would double check with your accountant.