Thank you for this excellent and informative video! It's a lot to absorb but you make it very understandable. Do you work with clients in BC or only Ontario? Thanks again!
Hi Ed, I like your videos a lot. They align with what I recommend to business owner clients. I do think there can be room for corporately held permanent insurance as long as there is a need coupled with the opportunity to leverage it for tax efficient income or opportunities down the road. I'd love to hear your thoughts on this.
Again awesome topic. Just another question about being a conservative business owner (is that an oxymoron) but I understand as just with the teen on the couch you don't want to lose your money or your teen. I believe though that if you have certain principles already in place, your mindset will ensure your money doesn't just sit in the bank account and your teen won't just sit on the couch. However, if you wanted a portion of your investments to be in fixed income, say GICs, to get you through the next three years (cash cushion some people call it), would it not make sense to use a percent of the money in your corporation to invest interest bearing gics since all investment income is taxed at same rate in corporation and keep your capital gain investing in your non registered personal account because they are more tax efficient personally?
Hi Ed! I loved this, thank you. Just to be clear this is for someone that has a business. You wouldn't recommend putting more money into the corporation just to invest, would you? A quick question about the Capital Discount Account. Why? Why is it necessary? Why not just put the amount in the shareholders loan account? Do you move it out of the cda to the loan account after the year or keep it in the cda until you withdraw the cash from the business bank accpunt. I guess you are saying to take that money out in the year of gain so you don't lose it in a year that you might have a capital loss, which makes sense but I don't see how you get away from paying the 50 percent on passive income though. If you earn income don't you have to pay tax on it regardless of if you take it out as salary or dividemd. For example.. You earn 10% interest on a 100k GIC, then you pay 5k of the 10k to CRA and if you take a dividend that year you only have 105k to take out. Then you take out the 105k out of the corporation as a dividend say and pay tax on it. So 50% on the interest plus your personal tax on the dividend... lots of tax. I do fully understand the benefit of smoothing out your income to take advantage our progressive tax system but the tax on investment income is so high. Is it worth it? I guess the money might as well be doing something while you are waiting to take it out of the corporation. Thank you so much for putting such meaningful content out there. I love listening to you, as you really make me think.
Thank you for this excellent and informative video! It's a lot to absorb but you make it very understandable. Do you work with clients in BC or only Ontario? Thanks again!
Hi Ed, I like your videos a lot. They align with what I recommend to business owner clients. I do think there can be room for corporately held permanent insurance as long as there is a need coupled with the opportunity to leverage it for tax efficient income or opportunities down the road. I'd love to hear your thoughts on this.
Again awesome topic. Just another question about being a conservative business owner (is that an oxymoron) but I understand as just with the teen on the couch you don't want to lose your money or your teen. I believe though that if you have certain principles already in place, your mindset will ensure your money doesn't just sit in the bank account and your teen won't just sit on the couch. However, if you wanted a portion of your investments to be in fixed income, say GICs, to get you through the next three years (cash cushion some people call it), would it not make sense to use a percent of the money in your corporation to invest interest bearing gics since all investment income is taxed at same rate in corporation and keep your capital gain investing in your non registered personal account because they are more tax efficient personally?
Hi Ed! I loved this, thank you. Just to be clear this is for someone that has a business. You wouldn't recommend putting more money into the corporation just to invest, would you? A quick question about the Capital Discount Account. Why? Why is it necessary? Why not just put the amount in the shareholders loan account? Do you move it out of the cda to the loan account after the year or keep it in the cda until you withdraw the cash from the business bank accpunt. I guess you are saying to take that money out in the year of gain so you don't lose it in a year that you might have a capital loss, which makes sense but I don't see how you get away from paying the 50 percent on passive income though. If you earn income don't you have to pay tax on it regardless of if you take it out as salary or dividemd. For example..
You earn 10% interest on a 100k GIC, then you pay 5k of the 10k to CRA and if you take a dividend that year you only have 105k to take out. Then you take out the 105k out of the corporation as a dividend say and pay tax on it. So 50% on the interest plus your personal tax on the dividend... lots of tax. I do fully understand the benefit of smoothing out your income to take advantage our progressive tax system but the tax on investment income is so high. Is it worth it? I guess the money might as well be doing something while you are waiting to take it out of the corporation. Thank you so much for putting such meaningful content out there. I love listening to you, as you really make me think.