Thread: Canadian Tax Laws

I wonder why there is a discrepancy between phone and "in person" in the 1st place. This was the Downtown Calgary Scotia main branch. I was shocked at her response. She was quite certain that they do not deal in Dinars.
If there is time I will likley go on Monday in person and give that a try.
Still confused as to why there is difficulty in the 1st place. One would think
they either deal in Dinar or they don't. Its not like the Scotia bank is small and obscure.

Thanks again for all your help.

P.S. I would love to keep this thread alive, as finacial matters for Canadians can differ somewhat than in other places.

The Main branch at King and Bay downtown Toronto definitely sell Dinar.... I have purchased all of mine there and the staff were interested in what I was doing... I suggested they act sooner then later. Cannot wait to see "who took the advice".

Originally Posted by robmccallum01

Hey fellow Canadians,

Just wanted to say a quick thanks for this very usefull information. I actually started a thread about canadian taxes a few months ago but I think it just got bumped to the bottom of the page LOL. Thanks for this new thread though.

I bought my first batch of dinars almost six months ago from Scotiabank here in Ottawa and have since gone back just a few more times ( i'm a dinarholic!)

I am 26 years old and unfortunately know NOTHING about taxes, capital gains and all that other fun stuff.

CDN Scrooge, I was just wondering if you would be able to give us an example of how our dinars would be taxed for people like me who are 'tax dumb' ? Let's say for example someone has $1 Million Iraqi Dinars. From this example, can you please give us a list of how we would declare this etc. I would like to know how much of that $1 Million will be taxed all the way down to the end result , that is if you don't mind?

Thanks very much from a fellow Canuck!

Cheers all,

Rob

Ok, here is a summary for John Doe who has a net capital gain of $1 million. To keep it simple I have assumed that his other taxable income (employment, etc.) is $35,000. The tax rates vary slightly from province to province so for demo purposes I will assume he is a resident of BC (like me) and I am using 2005 rates because it's easier for me. On the $35,000 only his total tax payable would be $5,133 and of course would be covered by the deductions from his paycheques.

Now if we add $500,000 taxable capital gain (taxable portion of the $1 million) which is reported on schedule 3 by the way, his total tax would be $217,539 which means the tax on the capital gain itself would be $212,406, or 42.4% of the taxable capital gain. This is not a flat rate, but is the effective rate on this amount due to the different rates at different levels. With this amount of gain he is at the top bracket and anything over and above the amount used here would be taxed at the highest rate which is 43.7%

This is an example only and of course would yield different results for different levels of employment income and amount of the gain. Hope this is of use to you.

As I said earlier, there are a few things that may be done depending on an individual's circumstances to reduce this amount somewhat. There is no "cookie cutter" approach that will work for everyone. That is why I suggest that once the reval takes place and you know what your gain is, you need to sit down with a tax professional and discuss your particular situation to see which, if any, things can be done to reduce the overall tax burden.

I believe a number of provinces ( BC, AB, SK ) have NO prvincial capital gains tax. I live in AB and would have an effective maximum tax rate of 14.5%. I would also have 1 000 000.00 tax free capital gain (splitting with my wife) which leaves quite a palatable tax amount. Check the Canada tax regulations for other features dealing with 'not-at-arm's-length' family relationships. There are some VERY attractive features. If I realize a 5 million dollar gain I anticipate a total tax of <60 000.00. I am an engineer, not an accountant, but I am quite certain this information is correct.

Originally Posted by nventr

I believe a number of provinces ( BC, AB, SK ) have NO prvincial capital gains tax. I live in AB and would have an effective maximum tax rate of 14.5%. I would also have 1 000 000.00 tax free capital gain (splitting with my wife) which leaves quite a palatable tax amount. Check the Canada tax regulations for other features dealing with 'not-at-arm's-length' family relationships. There are some VERY attractive features. If I realize a 5 million dollar gain I anticipate a total tax of <60 000.00. I am an engineer, not an accountant, but I am quite certain this information is correct.

I'm afraid you are mistaken about some of the provinces having no capital gains tax, they all operate on the same basis as the feds. Certain types of capital gains transactions have special tax treatment but Iraqi dinars would not fall into any of those catgories. The tax regulations you are referring to regarding capital gains exemptions on non-arm's length transactions refer to transferring farm properties and shares of Canadian controlled private corporations. The first 500,000 of taxable capital gain on those transactions is tax free. Again Iraqi dinars would not be eligible for this exemption.

Also, the 2005 federal tax rates are as follows:
0 - 35,595 15%
35,596 - 71,190 22%
71,191 - 115,739 26%
over 115,749 29%

Please note these are the federal rates only, you would have to add the provincial rates. The provincial rates are also graduated, although they have different levels where they change. So I don't know where you are getting the 14.5% rate.

My suggestion is that you consult with a tax professional before you do any transactions.

Cdn Scroodge, where in Canada are you located ?
What are the tax implications if I were to gift my dinars to someone.

Thanks

Arco

Just realized I made a statement earlier that may have not been clear enough.

When I said that assets could be transferred to your adult children at cost I meant to say ...... that is, if you transfer the dinars prior to a reval.

Otherwise they would have to be transferred at "fair market value".

Originally Posted by Arco

Cdn Scroodge, where in Canada are you located ?
What are the tax implications if I were to gift my dinars to someone.

Thanks

Arco

Hi Arco.

I am in BC in the beautiful Okanagan valley (otherwise known as paradise LOL) in Westbank, which is right across the lake from Kelowna.

If you gift your dinars prior to a reval there are no tax implications to you. However, the recipient upon cashing them in will have to declare the capital gain on his/her tax return.

That is, unless the recipient is a minor. That situation opens a can of worms with regards to trusts, attribution rules (possibly), etc etc.

Originally Posted by Cdn Scrooge

Just realized I made a statement earlier that may have not been clear enough.

When I said that assets could be transferred to your adult children at cost I meant to say ...... that is, if you transfer the dinars prior to a reval.

Otherwise they would have to be transferred at "fair market value".

When I started this thread, which also happened to be started once before, was to assist our fellow Canadians in keeping as much profit as possible through legal means.

You have been a real asset here in helping do just that.

I have spent many, many hours talking with Revenue Canada. Its been tough understanding there lingo, but you have helped all of us to get ready for the big day. My very, very minor contribution pales in comparison to what you have contributed.

For this I say Thank-You.

Originally Posted by robmccallum01

Hey fellow Canadians,

Just wanted to say a quick thanks for this very usefull information. I actually started a thread about canadian taxes a few months ago but I think it just got bumped to the bottom of the page LOL. Thanks for this new thread though.

Rob

I can Merge it here if needed. I remember seeing it and will go see if it is a logic move for you guys.