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

Beer-Batter-fish&Chips

Beer Batter Fish N’ Chips

The Irv opened its doors at 195 Carlton St. on March 1st 2014 with a tribute to Bob Irvine the man they called Irv. When opening The Irv we wanted to concentrate on fresh local food and great beer … [Read More...]

Cabbagetown-movie-in-the-park

Cabbagetown Movie In The Park

Stephen-Thomas Maciejowski Grab your picnic blanket and get ready for Cabbagetown Movie In The Park returning for its 3rd annual installment presented by the Cabbagetown BIA on Wednesday July 18th … [Read More...]

Buds-and-blossioms

Buds & Blossoms is Growing!

Contributed by Linnea Obern Hi friends! We are Buds & Blossoms, a family activity studio serving Cabbagetown with a diverse selection of educational and entertaining classes and events for … [Read More...]

garden-tour-Poster-8

Hidden Gardens & Private Spaces

This unique tour continues to draw people from across Toronto and beyond. June 3 will be the 11th time we have had the privilege of peeking into the hidden gardens.  A self-guided tour of these … [Read More...]

Kim-Ezeard-ad

Construction, Construction Everywhere!

Contributed by Kimberley Ezeard Cabbagetown was not exempt from what seemed like the never ending winter, and now we enter the season of never ending construction and traffic detour… “Why”, you ask? … [Read More...]

green thumbs

Green Thumbs

Photo & article contributed by Lenka Gazova – Lenka Life Photography *VIP   Green Thumbs offers food growing and environmental education programs in 4 inner-city schools and 2 park … [Read More...]

Meredith-BIO-Ad

Meredith Cartwright

Meredith Cartwright is an accomplished human rights lawyer, businesswoman and advocate for Toronto Centre. Meredith earned her law degree from Queen’s University and holds a Master’s degree from … [Read More...]

FIretruck-cabbagetown

FUN IN THE SUN…

Contributed by Sarah Cook- Publisher. Fish, Festivals and Firetrucks… oh my!   Weather you prefer Fahrenheit or Celsius, it is climbing! It’s going to be a hot one this year, Summer 2018 is … [Read More...]

David-MORRIS-photo-for-article-PSN-June-18

David Morris

David Morris believes real, progressive change starts with opportunity, connection, and community. A belief in community underscores everything David does. David understands Toronto Centre’s biggest … [Read More...]

The Cabbagetown Youth Centre

Contributed by Sharmini Fernando Candidate The Cabbagetown youth Centre has provided free or close to free recreation, pre-school, summer camp, after-school and youth focused programs for over two … [Read More...]

Body-Karma

Are they really listening?!

Contributed by Jennifer Shearer The way we talk about our bodies can have an affect on the little humans in our lives…!   The journey to self acceptance is a long one, which can lead to a … [Read More...]