A Look at Timely Financial Issues

Contributed by Edvard Ryder. Do you have fond memories of family summer vacations at the cottage spent swimming in the lake, building sand castles on the beach, or fishing on the dock? Do you envision your children and grand-children making similar memories there for years to come, even after you’re gone?
If your wish is to pass on your recreational property to your children (or someone other than your spouse), keep in mind there are tax implications. Half of the capital gains on a cottage or vacation property are included in your income. Depending on the province you live in, the taxable portion could be taxed at up to 50 per cent. You might not be in the highest tax bracket, but the impact can still be significant.

 
You can’t avoid capital gains tax by selling your home and making your cottage your primary residence. And selling the cottage to your children for a token amount of $1 won’t help either. But there are things you can do to help minimize taxes on your estate.

 
Here’s one way. Let’s say there’s $50,000 of tax owing from the capital gain on your cottage when your children inherit it. If you had purchased a $50,000 last-to-die life insurance policy with your spouse, your children would get a $50,000 tax-free death benefit after both of you pass away. That money could be used to cover the tax on the capital gain.

 
Another strategy is to buy a life insurance policy, and name a charity as the beneficiary. Because charitable donations can be applied against up to 100 per cent of your net income in the year of death, the donation credit from the death benefit could reduce or even eliminate the tax bill. The end result: your children, as beneficiaries of the estate, would take over the cottage without having to worry about selling it to cover the taxes.

 
These are only two of the options available. As a Sun Life Financial advisor, I can help you decide the best route to take and how much life insurance you need to protect the value of your recreational property. Everyone’s legacy will look different. I can help you tailor your legacy plan to address your unique goals and provide solutions for a tax-efficient transfer of your estate.

TwitterGoogle+FacebookLinkedInDiggStumbleUponBlogger PostDeliciousShare

Other News

david-morris-copy

System is Failing Seniors

Contributed by David Morris - The COVID-19 Pandemic Revealed Our System is Failing Seniors, Ontario Liberals Have a Plan to Fix It The COVID-19 pandemic has touched the lives of every Ontarian. We … [Read More...]

PSN kwt copy

Dear residents and neighbours

Contributed by Kristyn Wong-Tam - It is with great humility that I am running in the upcoming election to represent you as your NDP Toronto Centre champion at Queen’s Park! As your local City … [Read More...]

MPP Job Description

Contributed by George Smitherman, MPP representing Toronto Centre – Rosedale, Toronto Centre in the 34th, 35th and 36th Parliament (1999-2010) Position: Member of the Ontario Legislature Employer: … [Read More...]

Toronto-Centre-election

Provincial Election numbers?

Contributed by Pstreet News. The provincial election is fast upon us, and there is a great battle between the Liberals and the up and coming NDP. With Suze Morrison stepping aside for Kristyn … [Read More...]

rogco-wines

Brigaldara Soave DOC

Contributed by Isabel Wai, Brand Associate, Rogers & Company In the 2000s, Stefano Cesari and his sons, Lamberto and Antonio, initiated a profound renewal at Brigaldara. Today, the estate covers … [Read More...]

ForsythiaFestival-3

Forsythia Festival Thanks

THANK YOU The organizers of the Forsythia Festival would like to thank all the volunteers and sponsors for a long overdue and great day! Financial Donors Meridian Daniel et Daniel Catering & … [Read More...]

green-thumbs

What Are We Planning for the Gardens

For the last two growing seasons we have not been able to be in the gardens with the children so we are excited to be planning in person programs for the children and after what felt like the longest … [Read More...]

Bostok-hathaway

GETTING TO KNOW YOU

Local residents and Real Estate agents Norman Hathaway and Anita Bostok of bostokhathaway.com introduce us to local Cabbagetown Shop keepers is their ongoing series "Getting to Know you". Cabbagetown … [Read More...]

tony-brady-forsythia-festival

My brother, Tony Brady

Contributed by Joanna Brady Schmida - When I was approached by Peter Lovering recently about an addendum to the article he was planning to write for the Parliament Street News, I was delighted. For … [Read More...]

PSN-mar22-01

Hello Beautiful Readers!!

Here we go again, another year of the Parliament Street News. This is our first edition of the year and it was a long winter. But, what says spring better than the Forsythia Festival. After missing … [Read More...]

MapleLicious-1

SPRING BECKONS

Winter Draws to a Close, Spring beckons, the sap is running! Contributed by The Cabbagetown BIA It’s been another long, cold winter, with the odd tease of balmy weather to come. Dire and traumatic … [Read More...]

ukraine-flag-pstreet-news

Thoughts from Kyiv 

Contributed by Professor Mychailo Wynnyckyj in Kyiv. He and his family are in hiding, writing and fighting from a safe(r) house outside Kyiv - Yesterday’s bombing of the maternity hospital in Mariupol … [Read More...]

walterhuston-cabbagetown-people

Walter Huston 1884 – 1950

Academy Award-winning Actor - Contributed by www.cabbagetownpeople.ca. Walter Huston was born in Toronto where his father was a building contractor. He attended Wellesley, Ryerson and Lansdowne … [Read More...]