In our circles, we affectionately called them bank brats, but in truth they were truly brave souls. I am referring to the children of bankers who endure a couple of years in several different locations as one or more of their parents skip along the corporate ladder on their way to some higher responsibilities and (hopefully) better pay.
My children were no exception for the first part of my career. When we moved here exactly 14 years ago today, my eldest daughter shuffled nervously in to her Grade 7 class, a stranger among a group cool 12-year-olds.
It was her sixth school in seven years. She tried to be strong, and worked hard to fit in, but her emotions got the better of her several times as she tried to find her way.
Years before, there had also been crying when we left Cranbrook while our next-door neighbours (and dear friends) came out in the street out in the yard to bid us farewell. One daughter threw a tantrum which would not relent for over an hour.
Not even a cute kitten in her lap could cheer her.
Three years later, when we left tiny Telkwa to venture over to the relatively big smoke of Prince George, I was determined to head off the waterworks.
Taking this same daughter in the truck with me, I spoke to her firmly about courage and fortitude, then pulled away in to the night. But within 30 seconds, long before she could muster a moist eye, I pulled over, plunked my head on the steering wheel and wept out loud.
How we would miss our little picturesque village.
Perhaps unsurprisingly, as adults, they all seem to have the travel bug, bravely seeing foreign continents I have only dreamed to go to so far.
The years roll on and we once again find ourselves looking at some year end planning idea.
As year-end approaches, taking some time to review your financial affairs may yield significant tax savings. I am summarizing some common year-end tax planning strategies in the next few articles, beginning with part one below.
Some year-end strategies to consider:
TAX LOSS SELLING
If you have sold some assets and realized capital gains during the year, and you are holding other securities with unrealized losses, consider selling them as well. This tax loss selling strategy is a common year-end tax planning technique. Review your portfolio to determine if any investments are in a loss position and no longer meet your investment objectives.
Be sure to consider opportunity and transaction costs before selling investments just to trigger the tax loss.
When disposing of a security, the sale for Canadian tax purposes will be deemed to have taken place on the settlement date. Assuming the normal three-day settlement period, in order to utilize a tax loss selling strategy for the 2014 tax year, transactions must be initiated by Dec. 24, 2014 for Canadian securities and by Dec. 26, 2014 for U.S. securities in order to settle during 2014, but don't wait until then, just in case you miss it.
For mutual fund investments, check with your advisor for settlement dates.
SUPERFICIAL LOSS RULES
In order to ensure that your capital loss can be claimed, you must be aware of the superficial loss rules. A superficial loss will result in your capital loss being rejected, and occurs when a security is sold for a loss and both of the following also transpire:
1) The identical property is re-acquired during the period beginning 30 days before the disposition and ending 30 days after the disposition of the original security (a 60 day total window); and
2) At the end of the above period, you still hold the identical property.
The superficial loss rules will also trigger if the investment is re-acquired by an affiliated person during the time period described above, such a spouse, or a corporation or trust controlled by or benefitting you and/or your spouse.
Superficial losses apply across all of your accounts; so if you sell an investment in one account and purchase it in another within the 30 day period, you may be offside
Of course we are only touching the surface of these issues here. This publication is not intended as tax or legal advice. Readers should consult a qualified legal, tax or other professional to ensure that their individual circumstances and the latest information have been considered properly.
Mark Ryan is an advisor in Prince George with RBC Wealth Management, Dominion Securities (member CIPF) and can be reached at [email protected].
