Kustom Design Shares Year-End Tax Planning Ideas for Investors

Top Quote Useful tax planning approaches to help investors get taxes right. End Quote
  • (1888PressRelease) December 29, 2010 - Calgary, AB - According to Kustom Design CEO Michael Lepitre, investors have a number of planning tactics available to them that will help accelerate profits and defer losses in 2011 as tax rates are scheduled to rise.

    "Many investors do not plan before they make the investment," said Lepitre. "If investors plan taxes before they invest, they can save themselves large amounts of tax. Just by deciding to invest under the right spouse can make all the difference."

    Lepitre said in order to become wealthy, a person must invest and, as an investor, it is better to have passive residual income than active income.
    "The more streams you have, the better," he said. Investments are found in three asset classes including real estate, paper and business where income is produced through capital gains, bonds and dividends. In real estate, income is regularly rental income or capital gains, where only 50 per cent of capital gains are taxed and personal residence is exempt.

    "It is important to ensure that an investor is making a good rate of return on interest to make the after tax amounts worth it," said Lepitre. "Paper investments such as bonds and other notes produce interest income, which is taxed at the highest rate of all investment income."

    In business, investment income comes in the form of dividends and capital gains, such as stocks purchased in a public company. Investments held in a corporation are considered passive income (unless investing is the main line of business of the corporation), and are also taxed at the highest marginal tax rate.
    "The advantage of investing through corporations is that a person can maintain control of their assets without ownership of them," said Lepitre. "This allows for creditor protection."

    When borrowing money to invest in anything other than a personal residence or RRSP, it is tax deductible, and most income from investments (foreign or domestic) that are owned personally are taxable and must be claimed on personal tax returns. Lepitre noted that a crucial component to tax saving in investment is asset allocation."Allocating which spouse or family member holds the investment, allocating the trust or a corporation to hold the investment or holding the investment offshore all lead to tax savings when properly planned," he concluded.

    About Kustom Design Group
    The Kustom Design Group of Companies is a group of interconnected businesses that make up a full service accounting and financial firm. Based in Calgary, Alberta, and renowned for our expertise and experience in accounting and financing, Kustom Design knows that professional integrity is crucial. Our team of professionals offer year-round personal or business service that is tailored to each of our client's financial needs through the funding, and wide selection, of accounting services, products and strategic planning.

    Media Contact:
    New Wave Media | Ashley Feist | (403) 457-0919 ext. 222 |ashley ( @ ) new-wavemedia dot com

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