Search found 2186 matches

by OptsyEagle
27 Mar 2024 13:00
Forum: Retirement, Pensions and Peace of Mind
Topic: Contributing to RRSP vs TFSA
Replies: 10
Views: 269

Re: Contributing to RRSP vs TFSA

Her marginal tax rate, which is the one that is more important to your question, is greater then 36% and stays that way down to about an income level of $115K and is still above 30% for income down to about $60,000. This is why the earned income number is so important to be able to provide the advice you seek. Marginal tax rate is also known as the tax owed on your next dollar earned and is also the tax saved on the first dollar deducted from taxable income. Hence its importance to your question. RRSP contributions reduce taxable income because they are deductible. So if she earned $125,000 and put $10,000 into her RRSP she would save $3,600 in taxes on the $10,000 contribution. 36% of it. But, if she earned $125,000 and puts $30,000 into h...
by OptsyEagle
27 Mar 2024 11:37
Forum: Retirement, Pensions and Peace of Mind
Topic: Contributing to RRSP vs TFSA
Replies: 10
Views: 269

Re: Contributing to RRSP vs TFSA

Are you using average tax rates or marginal tax rates? What province are you in?

I don't blame you for keeping your income secret but as I said in my edited post above it is kind of hard to help people with income tax advice when you don't know how much income they earn. Perhaps others can help.
by OptsyEagle
27 Mar 2024 11:27
Forum: Retirement, Pensions and Peace of Mind
Topic: Contributing to RRSP vs TFSA
Replies: 10
Views: 269

Re: Contributing to RRSP vs TFSA

canadianrider wrote: 27 Mar 2024 10:14
OptsyEagle wrote: 27 Mar 2024 10:01 Without knowing your wife's tax brackets little advice can be given. A pay bump from $10,000 per year to $15,000 per year would mean nothing. A pay bump from $50,000 per year to $150,000 would make a big difference on which account I would contribute to.
This year she was taxed at a 26% rate vs 21% last year. If that helps.
I don't know if you are using is average tax rates or marginal tax rates, or if it includes both federal and provincial taxes. I don't even know what province you are in. I don't blame you for keeping your income secret but it is kind of hard to help people with income tax advice when you don't know how much income they earn. I think I will let others guess at it.
by OptsyEagle
27 Mar 2024 10:01
Forum: Retirement, Pensions and Peace of Mind
Topic: Contributing to RRSP vs TFSA
Replies: 10
Views: 269

Re: Contributing to RRSP vs TFSA

Without knowing your wife's tax brackets little advice can be given. A pay bump from $10,000 per year to $15,000 per year would mean nothing. A pay bump from $50,000 per year to $150,000 would make a big difference on which account I would contribute to.
by OptsyEagle
27 Mar 2024 09:58
Forum: Taxing Situations
Topic: New T3 requirements for joint accounts [that might be bare trusts]
Replies: 204
Views: 44273

Re: New T3 requirements for joint accounts [that might be bare trusts]

Interesting opinion piece on this from the Financial Post.

https://ca.finance.yahoo.com/news/opini ... 58626.html
Opinion: Canadians will ignore the new trust reporting rules. So will the Canada Revenue Agency
by OptsyEagle
26 Mar 2024 08:04
Forum: Retirement, Pensions and Peace of Mind
Topic: Single premium immediate annuity (SPIA)
Replies: 95
Views: 3898

Re: Single premium immediate annuity (SPIA)

Marcus Aurelius wrote: 25 Mar 2024 22:47
News wrote:alternative long-duration assets ("ALDA")
OptsyEagle wrote: 25 Mar 2024 10:22The annuity business here is the ALDA, advanced life deferred annuities.
I think there is a clash of terminology here with two uses for the same acronym.
Sure. Probably not Advanced Life Deferred Annuities, especially since I don't think I have ever heard of anyone ever getting one of those or even saying they were thinking about getting an advanced life deferred annuity. Whatever the long duration assets are, that they are talking in the news release, they were assets that were tied up in order to protect their risk exposure on that block of life insurance business. Annuities are one of the better ones to do this but there are some others.
by OptsyEagle
25 Mar 2024 10:22
Forum: Retirement, Pensions and Peace of Mind
Topic: Single premium immediate annuity (SPIA)
Replies: 95
Views: 3898

Re: Single premium immediate annuity (SPIA)

So this news release is in line with some of the discussions we have been having on how Canadian Life Insurers are regulated to offset the risk that they take on in order to protect the guarantees that they provide to their policy holders. Today, we see Manulife making some moves in this area. https://money.tmx.com/quote/MFC/news/8703359825586286/Manulife_announces_largest_Canadian_Universal_Life_reinsurance_transaction Key Highlights of the Transaction: Reinsures $5.8 billion of reserves of low ROE Canadian Universal Life block Represents largest Universal Life reinsurance transaction in Canada Attractive earnings multiple of 16.2 times and book value multiple of 1.0 times Releases $0.8 billion of capital, which we intend to return to shar...
by OptsyEagle
24 Mar 2024 07:58
Forum: Retirement, Pensions and Peace of Mind
Topic: LIRA, what to do?
Replies: 16
Views: 319

Re: LIRA, what to do?

Anyway you seem to know your options and the rest is probably more of a personal preference mainly because only you know how much money we are talking about and therefore the effect each option/maneuver will have. You have already mentioned your DB will take care of you in retirement. I would probably allocate all of the after tax severance to the mortgage but I would probably leave it at that. Keep the current mortgage payment the same to pay it down quicker after the lump sum payment. If you are not using fixed income in the TFSA/LIRA then I would probably not direct anymore investable assets to the mortgage. If you were planning on using fixed income then don't. Pay off your mortgage and call that your guaranteed fixed income investment....
by OptsyEagle
23 Mar 2024 18:29
Forum: Retirement, Pensions and Peace of Mind
Topic: LIRA, what to do?
Replies: 16
Views: 319

Re: LIRA, what to do?

optionable68 wrote: 23 Mar 2024 18:11
Old_guy wrote: 23 Mar 2024 17:50 I don’t understand. Why can’t I access the dividends? The amount will be under the 6% max withdrawal.
Where are you seeing a 6% max withdrawal for a LIRA? Show me a reputable link.
I suspect he is talking about transferring the LIRA to a LIF where he could take out between the minimum and the maximum. If the maximum was 6%, for example, and the dividends paid him 5% he would then have access to all of the dividends.
by OptsyEagle
23 Mar 2024 10:06
Forum: Taxing Situations
Topic: Final Return: Document Mechanics
Replies: 7
Views: 187

Re: Final Return: Document Mechanics

1) I imagine each FI is different but I suspect most will simply send you a snapshot of what the assets were worth on that particular date of death. So, no one will or needs to refer to the date of death in wording. Everyone involved, CRA, FI, Lawyers, You, will be well aware of the date of death. So, asset valuations on a particular date is what you will get. That date will be the date of death. 2) Not sure why you would want to do it the harder way and go get valuations yourself but I suspect CRA will be a lot more skeptical of anything you come up with, the way you are talking about getting it, then what an independent financial institution will provide. So I would not do that unless you can't get it from the FI. 3 and 4) I personally fi...
by OptsyEagle
23 Mar 2024 09:55
Forum: Retirement, Pensions and Peace of Mind
Topic: Designated beneficiary of TFSA, RRSP
Replies: 85
Views: 11365

Re: Designated beneficiary of TFSA, RRSP

Keep in mind that there is a big difference between winning a legal case in court and winning outside of court. At least the costs can be significantly different, but also the outcome. The problem with court is that the parties involved, plaintiff and defendant, do not know the final outcome of two very important points. 1) The total cost of fighting the case. 2) In whose favour will the judge rule. Obviously you are considering those two points right now, with serious apprehension. Right now the friends are not. They have the money and they believe they are golden. All it takes to change that mindset is the threat of legal action. Not legal action. The threat of legal action. Here, what I am alluding to is instead of contesting the benefic...
by OptsyEagle
22 Mar 2024 16:08
Forum: Retirement, Pensions and Peace of Mind
Topic: Reasons to unlock a LIRA
Replies: 6
Views: 262

Re: Reasons to unlock a LIRA

An annuity is likely what I would do in that circumstance. There is a general aversion to annuities here in FWF though. The thought of giving up control and maybe being cheated with an early death seem to be hurdles for many. There is also the back to back annuity for those that worry about losing money in the estate. The back to back annuity takes whatever lifetime income the annuity provides and buys as much life insurance as that annual payment can buy. So if you don't need the income from your registered accounts but just want to melt it down so as to not have it all taxed at a very high tax rate in your estate, it can provide some outsized estate benefits. You can use the full annuity payment or the after tax annuity payment, whatever...
by OptsyEagle
22 Mar 2024 15:16
Forum: Retirement, Pensions and Peace of Mind
Topic: Reasons to unlock a LIRA
Replies: 6
Views: 262

Re: Reasons to unlock a LIRA

Don't forget about the life annuity option. Nothing melts a LIRA away better, as well as giving total certainty to a lifetime of income, then a life annuity.

You can annuitize the whole LIRA or transfer it to a LIF, unlock 1/2 to the RRSP and annuitize the remaining 1/2 in the LIF. That is about the only way to get rid of that locked in account.
by OptsyEagle
22 Mar 2024 10:50
Forum: Retirement, Pensions and Peace of Mind
Topic: Reasons to unlock a LIRA
Replies: 6
Views: 262

Re: Reasons to unlock a LIRA

It's a personal opinion, but my wife had a LIRA and we decided not to bother with the additional paperwork of unlocking 1/2. The way I looked at it is you can't make the entire account go away (1/2 has to stay) so I figured since we were probably going to take some money out of registered investments, before age 71 anyway, why not LIF that account right away and take the maximum payment and keep it from growing too much. Her LIF is Federal so the max is about 6% plus or minus (she is 59). If she outlives me then it won't be any more difficult to manage it, since she has to maintain 1/2 of it in a LIF account anyway, and she would have plenty of other, and better places, to access withdrawals if she needed more money to live on. If I outlive...
by OptsyEagle
22 Mar 2024 08:34
Forum: Taxing Situations
Topic: How can I quote actual tax to RevCan as part of an appeal?
Replies: 12
Views: 604

Re: How can I quote actual tax to RevCan as part of an appeal?

I would just quote CRA's own bulletin on how to deal with line 12100 for declaring interest and other investment income for a T1 tax return: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12100-interest-other-investment-income.html Notes Special rules apply for income from property (including money) that one family member lends or transfers to another. For more information, see Other amounts you have to report on your return. Generally, when you invest your money in your child's name, you have to report the income from those investments. However, if you deposited Canada child benefit payments into a bank account or trust in your child's na...
by OptsyEagle
22 Mar 2024 07:10
Forum: Taxing Situations
Topic: New T3 requirements for joint accounts [that might be bare trusts]
Replies: 204
Views: 44273

Re: New T3 requirements for joint accounts [that might be bare trusts]

Stan wrote: 22 Mar 2024 04:56 Not sure if off topic but I am one of executors of a spousal trust and the accountant for the trust wants my
SIN. I am not a beneficiary. Do I have to give it?
I assume you mean one of the trustees of a spousal trust. Yes. What you are asking is the same as do you need to provide the person preparing your personal tax return your SIN. Of course you do. I assume this person will be preparing your T3 tax filing for the spousal trust.
by OptsyEagle
21 Mar 2024 14:49
Forum: Taxing Situations
Topic: New T3 requirements for joint accounts [that might be bare trusts]
Replies: 204
Views: 44273

Re: New T3 requirements for joint accounts [that might be bare trusts]

The video mentions that every trust needs to have a settlor as the person who originally provided the assets to be held in the trust. That makes sense for a normal trust because there has to be someone to provide the assets and appoint a trustee to administer them. What if a bare trust contains only CCB payments from the government? Is the government the settlor? The government provided the assets but the government didn't setup the trust or appoint the trustee. The parent setup the trust and appointed themselves as trustee, but the parent didn't provide the assets held in trust. Who is the settlor in this case? The government or the parent? The parent. The Settlor is the person that set up the trust or in the case of a bare trust, opened ...
by OptsyEagle
21 Mar 2024 09:13
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Cymbria (Symbol-CYB)
Replies: 22
Views: 1855

Re: Cymbria (Symbol-CYB)

^ That is some useful information when reviewing CYB's performance. The other point I would add is that by CYB owning so much of the Edgepoint Company itself, it creates a leverage effect on their performance that will go both ways. So far we have seen the 1.5% it added to the outstanding numbers they have posted with CYB and the other funds they manage. The same will hold true if or when their underperformance days come along. If the investments they make in CYB and their other funds (usually they are the same investments) stumble, even temporarily, the result of that will not only show up in the performance from those investments, but will likely show up in the value of the Edgepoint company itself, in a much bigger way. Investors are ver...
by OptsyEagle
21 Mar 2024 07:48
Forum: Taxing Situations
Topic: Underused Housing Tax Act
Replies: 37
Views: 2776

Re: Underused Housing Tax Act

I should add, while reviewing the particulars of this tax is that the tax seems to be directed almost exclusively towards foreigners, but the overall process is attempting to capture certain additional Canadians, that from what I see must be purely for data acquisition reasons. So, for example, when you input your personal data into their little questionnaire template below: https://www.canada.ca/en/services/taxes/excise-taxes-duties-and-levies/underused-housing-tax/who-file-pay.html#determine as soon as you say that you are either: 1) A foreigner or 2) A Canadian that owns property through a partnership or 3) A Canadian that owns property inside a trust. It immediately says that you are affected and therefore have to file the UHT tax form....
by OptsyEagle
20 Mar 2024 21:16
Forum: Stocks, Bonds, ETFs, Funds, REITS and More
Topic: Cymbria (Symbol-CYB)
Replies: 22
Views: 1855

Re: Cymbria (Symbol-CYB)

It does not matter what index a fund decides to compare itself to since active management vs passive is a philosophical question for each investor, more then a quantitative one. Us passive investors (older, with a lot more observations behind us) tend to lean towards passive because we have learned that there will always be someone doing better then the index, at any point in time or interval one wants to use, but with our experience we know that they tend not repeat that performance. This issue is not because we did not put in enough effort in figuring out how to find those few winners or were not motivated enough. It was because we eventually figured out that past performance appears to be more due to luck then ability, even with the mana...
by OptsyEagle
20 Mar 2024 20:18
Forum: Taxing Situations
Topic: Underused Housing Tax Act
Replies: 37
Views: 2776

Re: Underused Housing Tax Act

This is the 26th month of applicability, 4 months past a key relief measure, a few legislative and administrative changes in, and 40 days before a key filing. People in FWF are still not able to reach a clear consensus about what's expected. That's the "FWF test" for our tax authorities. If people on here don't know, Canadians have no clue. I have no problems with tax measures that require ultra-high net worth Canadians to get tax lawyers. That shouldn't apply for a measure affecting hundreds of thousands of ordinary Canadians. The penalty for a Weston or a Bronfman to fail an easy foreign investment disclosure is half as much as uncle Bob's fine because he didn't know winterizing the cottage last fall required a tax form disclos...
by OptsyEagle
20 Mar 2024 13:25
Forum: Taxing Situations
Topic: Underused Housing Tax Act
Replies: 37
Views: 2776

Re: Underused Housing Tax Act

This is what CRA considers a partnership: Adding to the terse CRA comment, here is my test: As a financially-educated Canadian who is conscientious and wants to stay on-side with CRA, and who even takes time to read CRA websites and come to financial forums, have you ever even briefly thought that you should be filing an income-tax return as a partnership (before the UHT)? No? Then you probably aren't a partnership. I suspect it probably started out that way and perhaps, after the judge drops their gavel, it would probably end up that way but in between it is quite the mess. With me I just went through their little test, as a good Canadian taxpayer, mainly on the property I own with my brothers, that our step father lives in, and thought, ...
by OptsyEagle
20 Mar 2024 12:44
Forum: Taxing Situations
Topic: Underused Housing Tax Act
Replies: 37
Views: 2776

Re: Underused Housing Tax Act

Are you filing taxes as a partnership? In my first reading I assumed that would be litmus test since most of the income tax act has reasonably clear legal definitions. I may be wrong, but CRA would have some work to do to "prove" a partnership exists in most basic co-ownership arrangements. Then again, with CRA judgements we have the rule: "Guilty until proven innocent." No. I decided that the evidence, as I was able to ascertain, would indicate that my holdings are not considered a partnership. This is what CRA considers a partnership: Determining the existence of a partnership To conclude that a partnership exists in the common law provinces, the Court affirmed that one must demonstrate that two or more persons are: c...
by OptsyEagle
20 Mar 2024 08:27
Forum: Taxing Situations
Topic: Underused Housing Tax Act
Replies: 37
Views: 2776

Re: Underused Housing Tax Act

I should add, that in reading the rules around this some parts stuck out at me that made me wonder about all the Canadians that may be affected that probably don't understand their obligations under the UHT Act. If you are indeed excluded you will be fine , however if you are not and do not file this disclosure by April 30, 2024, the interesting thing here is the penalties. On the surface it is not too bad. $1,000. OK, manageable right? It does not end there. Directly underneath that penalty they start talking about the penalties for those that don't file and also owe tax. So if you owe tax it would be 1% of the value of your property. But I don't owe that because I would be exempted right? Not right anymore. If I was affected but did not f...
by OptsyEagle
20 Mar 2024 07:45
Forum: Taxing Situations
Topic: Underused Housing Tax Act
Replies: 37
Views: 2776

Re: Underused Housing Tax Act

Cottage: Uninhabitable for 6 months, in the winter, due to inaccessibility. Why would this even be an issue? Aren't you an excluded owner (Canadian citizen or permanent resident)? No need to come up with excuses about inaccessibility. A taxpayer first needs to determine if they are either excluded or affected. If you are affected you then need to file and then determine if you are exempted or if you will owe the Underused housing tax. In my case I am taking the position that I am excluded so as to avoid the paperwork but I am not completely sure what the government considers a partnership. I am assuming that because I am not set up to make a profit I am not in a partnership but lets face it, anyone who owns property in joint ownership, eve...