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

Homelife-Mural-copy

Cabbagetown Outdoor Gallery

Contributed by Gerald Michaud, Broker - ManagerHomeLife/Realty One Ltd., Brokerage -- Recently, we commissioned a piece of Art by artist Christian English-Pratt.  The Art mural being painted is on our … [Read More...]

doubletake-thrift-store-cabbagetown

Double Take has all the giftables

Contributed by Sharon -- YSM’s Double Take Thrift Store is here to help you get ready for the holidays! Our staff are excited to share sustainable and creative ways the Cabbagetown community can show … [Read More...]

homes-in-cabbagetown

KNOW THAT HOUSE

Contributed by  Maryam Hatam -- Hugh Neilson House: This yellow brick house (295 Carlton St.), with a beautiful wooden door was built in the Gothic Revival style in 1878 for Hugh Neilson, a Scottish … [Read More...]

St Anne’s Heart

Contributed by Anita Bostok --- Back in the 1980s, a friend dared Carlos Carreiro to take a dance class. Up for the challenge, he went to the class that he found enjoyable, but it was the attractive … [Read More...]

Tony Lafazanis – Personal Injury Lawyer

Are You a Victim of a Hit and Run?

Contributed by Tony Lafazanis – Personal Injury Lawyer --- Getting in a car accident, for any driver, cyclist or pedestrian can be a nightmare. Unfortunately, hit and run accidents occur far too … [Read More...]

bostok-hathaway-getting-to-know-you

GETTING TO KNOW YOU

Cabbagetown is a neighbourhood of beauty, heritage, cultural diversity and inclusion. We are Anita Bostok and Noman Hathaway and we’re proud to contribute this regular feature where you get to know … [Read More...]

shuter-street-Pharmacy

Shuter Street Pharmacy

Shuter St Pharmacy located at 290 Shuter, Corner Shuter and Parliament is now under new management. Our professional team is ready to serve the Cabbagetown and surrounding communities for all their … [Read More...]

Pollinator-Project_Dixon-hall

Pollinator Grant Update

In 2019, staff from the Rooming House Project applied for the Pollinator Grant with help from local tenants who were interested in the project. Together staff and clients completed the application, … [Read More...]

greenthumbs

Green Thumbs Pumpkin Project

Green Thumbs Growing Kids is a local charity actively creating school food gardens in order to connect children to food and their environment. For 21 years we have been at the forefront of … [Read More...]

You’re just the right kind of wrong!

Contributed by Debjani Sinha Do you hear this background noise in your head? “You’re too loud!” “You won’t make it.” “They don’t like you.” “You look bloated.” “It’s all your fault.” and … [Read More...]

enough1

Wish I Could

Dub J announces new single with all-star cast to speak out against gun violence. Canadian producer Dub J unifies a Toronto A-List roster of JRDN, Maestro Fresh Wes, JD Era, Bizz … [Read More...]