Investors sometimes ask us whether they should hold certain investments inside or outside an RRSP to get the most tax benefits.

(We take a close look at how to use your RRSP to maximize your tax savings in our new FREE report, “Capital Gains Canada: 7 Secrets for Managing Your Canadian Capital Gains Tax Liabilities.” Click here to download your copy …read more »

In Canada, capital gains are taxed at a lower rate than interest. You can take advantage of that — and substantially cut your tax bill — if you structure your investments so that more of your income is in the form of capital gains.

(Our new free report, “Capital Gains Canada: 7 Secrets for Managing Your Canadian Capital Gains Tax Liabilities,” …read more »

Discover how to structure your investment portfolio in a way that could save you thousands of dollars

Click here to immediately download our new free report, Capital Gains Canada: 7 Secrets for Managing your Canadian Capital Gains Tax Liabilities.

As you consider how to manage your tax bill for the current income-tax season, you really shouldn’t be without our new free report, …read more »

When you sell any stock outside of an RRSP or RRIF, you must pay capital gains tax if you’ve made a profit on the sale.

To calculate your total capital gain on a share you sold during the previous tax year, subtract the adjusted cost base of the shares you sold from the total proceeds of the sale. The adjusted …read more »

ENCANA CORP $30 (Toronto symbol ECA; Shares outstanding: 750.2 million; Market cap: $22.5 billion; SI Rating: Average) and CENOVUS ENERGY $26.30 (Toronto symbol CVE; Shares outstanding: 750.2 million; Market cap: $19.7 billion; SI Rating: Extra Risk) are now trading as separate stocks after EnCana split itself into two separate companies.

One kept the EnCana name and trading symbol, and focuses on …read more »

Tax-loss selling (or tax-loss harvesting) is a strategy for lowering your Canadian capital gains tax that involves selling a security at a loss in order to offset your capital gains. You can then deduct these losses against your taxable capital gains in the current tax year.

For example, December 24 is the 2009 deadline for tax-loss selling on the Toronto Stock …read more »

Earlier this year, a client of Successful Investor Wealth Management Inc. was unhappy to see that she had earned capital gains of around $80,000 in 2008, and would need to come up with $20,000 to pay her capital gains tax bill. Her first reaction was, “How did this happen? What can I do to stop it from happening again?”

This was …read more »

There are three forms of income in Canada: interest, dividends and capital gains. Each is taxed differently. Smart investors can use that to their advantage.

With stocks, you only pay capital gains tax when you sell or “realize” the increase in the value of the stock over and above what you paid for it. (Although mutual funds generally pass on their …read more »

Capital gains tax must be paid on the profit that comes from the sale of an asset. An asset can be a security, such as a stock or a bond, or a fixed asset, such as land, buildings, equipment or other possessions.

Let’s look at an example. Say you purchased 1,000 shares of TD Bank at $20 per share many …read more »

Tax-loss selling (or tax-loss harvesting) occurs when you deliberately sell a security at a loss in order to offset capital gains in Canada. You can then use these losses to offset your taxable capital gains.

For example, the 2008 deadline for tax-loss selling on the Toronto Stock Exchange was December 24, 2008. If you sold at a loss on or before …read more »

Two of our long-time recommendations —

Transalta Corp. $37 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 199.0 million; Market cap: $7.4 billion; SI Rating: Average)

and

Fording Canadian Coal Trust $90 (Toronto symbol FDG.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 150.0 million; Market cap: $13.5 billion; SI Rating: Average) — have attracted unusual takeover bids.

The private …read more »

MDS INC. $22 (Toronto symbol MDS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 121.9 million; Market cap: $2.7 billion; SI Rating: Average) has repurchased 15.8% of its outstanding common shares at $21.90 each under a Dutch Auction. The buyback cost MDS $499.3 million. To put that in context, the company lost $0.02 U.S. a share (total $2.0 million U.S.) from …read more »

This past year brought richly rewarding takeovers of several of our long-time favourites including Falconbridge, Inco, Fairmont and Sleeman. As a result, you may face a substantial capital-gains tax bill.

Before yielding to the year-end tax-loss selling urge, keep in mind that it’s always a mistake to sell good stocks at this time of year. Tax-loss selling sometimes drives share prices …read more »