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320 invested gives each kid almost 400k before tax as a downpayment on a house when they finish school. Taxes could be minimized by selling off securities after they turn 18 to trigger CG of 80K a year or so on which they'd owe very little.
My current situation is;
On a slightly related note, here is a story about a couple in Uxbridge. Pulled 150K out of a HELOC to YOLO in 2018. Had no intentions of paying it back. They thought they had life insurance so when one died, the debt would disappear. Life insurance on the HELOC terminates at 70 so it was uninsured. Wife dies, debt survives, husband is scratching his head as he has no way to pay it off (without selling his house which it sounds like he has no intention of doing).
Funny you say that, it's a bit of a joke around our family. My parents are emotionally attached to a couple of stocks -- Dad to Garmin, he got a pile pre-IPO while working with them, and Mom with IBM - she got a handful when she retired. I keep 100 shares of each in their portfolios, they would be devastated if I sold them -- they are the only investments they ever ask me about.
There's a whole lot of 'I thought' in that article.On a slightly related note, here is a story about a couple in Uxbridge. Pulled 150K out of a HELOC to YOLO. Had no intentions of paying it back. They though they had life insurance so when one died, the debt would disappear. Life insurance on the HELOC terminates at 70 so it was uninsured. Wife dies, debt survives, husband is scratching his head as he has no way to pay it off (without selling his house which it sounds like he has no intention of doing).
Ontario man devastated to learn $150,000 line of credit isn't insured after wife dies
An Ontario man found out that a line of credit he thought was insured actually isn't after his wife of 50 years died.toronto.ctvnews.ca
And paying $800 monthly installments that you thought included insurance. It doesn't take a whole lot of paying attention to realize 150k at 7% is just under $900 a month in interest and life insurance for old people is very expensive.
www.cheknews.ca
No surprise at all how little politicians think about policies before launching them. Who cares who it affects, how much it costs or whether it is good policy as long as it can get you one vote more than it costs you.Unintended consequences.. I hope they at least fix this part of it.
Island parents say trust for disabled son will be hit by increased tax
A capital gains tax increase from 50 to 67 per cent is meant to tax the wealthy, but a Campbell River couple says their disabled son's trust will also be hit.
If the money is for the children, let them own it and trigger the CG annually. With 50% of the return taxable as income, they have to make a gain of >$30K in a year to be in tax territory.
For the kids getting free lots to build on, they should be throwing 20k each to grandma and problem is solved. If they can't afford 20k, they sure as hell cant afford to build houses.Seems pretty clear. Not much room for interpretation. I should send this article to realtor who told me the complete opposite a couple weeks ago who has been in the game for 30 years...did exact same thing helped his daughter out, paid no taxes.
'I'm not wealthy': Ontario senior shocked she owes $40,000 in capital gains after gifting land
An Ontario senior who wanted to help her daughter and grandson eventually own homes one day decided to give them two lots on her property as a gift — but she didn’t know it would eventually cost her tens of thousands of dollars.
What unintended consequence? The new Capital Gain rule hasn't come into effect yet, her lawyer told her she's going to have to pay it regardless...Unintended consequences.. I hope they at least fix this part of it.
Island parents say trust for disabled son will be hit by increased tax
A capital gains tax increase from 50 to 67 per cent is meant to tax the wealthy, but a Campbell River couple says their disabled son's trust will also be hit.
Lots like the ones described (one with a hydro tower, and one partial wetland) I'd be trying to sell those off and just taking the money.
"I'm not wealthy" but I'm doing well enough to have a paid off place of my own and can afford to give away $250K worth of land.Seems pretty clear. Not much room for interpretation. I should send this article to realtor who told me the complete opposite a couple weeks ago who has been in the game for 30 years...did exact same thing helped his daughter out, paid no taxes.
'I'm not wealthy': Ontario senior shocked she owes $40,000 in capital gains after gifting land
An Ontario senior who wanted to help her daughter and grandson eventually own homes one day decided to give them two lots on her property as a gift — but she didn’t know it would eventually cost her tens of thousands of dollars.
She probably has very little money but a decent net worth. Net worth doesn't necessarily allow you to pay bills. More lazy media coverage though. If they want to play the "poor me" card, they should have included what else she has. Is there another lot that she could sell to cover the tax etc. Most people don't own their primary home plus two random lots across the street.
Crap you are right. Apologies for that.
This is what I was replying to.Seems pretty clear. Not much room for interpretation. I should send this article to realtor who told me the complete opposite a couple weeks ago who has been in the game for 30 years...did exact same thing helped his daughter out, paid no taxes.
'I'm not wealthy': Ontario senior shocked she owes $40,000 in capital gains after gifting land
An Ontario senior who wanted to help her daughter and grandson eventually own homes one day decided to give them two lots on her property as a gift — but she didn’t know it would eventually cost her tens of thousands of dollars.
Also, even if there was a punt available for some situations (eg cottage being passed down), presumably the kids would be using this as a primary residence to there would be no tax payable in the future. I guess there could be a complicated exemption where you punt the tax with a lien and have to repay the tax with interest in the future but that number would be shocking by the time it came around. 20K at 5% 40 years later is over $140k. Big ouch.
Let the benefactors pay the taxes - if someone in the fam was willing to give up a chunk of property for the cost of CG taxes, I'd be the first pig at the trough.
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