TSXV:TLC.P - Post by User
Comment by
desertmuleon Jul 22, 2011 12:44pm
149 Views
Post# 18861714
RE: RE: RE: RE: RE: RE: RE: RE: RE: What will it t
RE: RE: RE: RE: RE: RE: RE: RE: RE: What will it tWhat are the tax advantages?
- If you were to invest $10,000 in flow through shares, providing that they are eligible for the tax breaks, you can claim the full $10,000 on your tax return. If you are in the 40% tax bracket, that would equate to a $4,000 tax return for that year.
How does it work?
- As stated above, you get to claim the FULL amount invested against your income. However, when you sell, your adjusted cost base (ACB) is set to
, ie. whatever you sell for is your PROFIT.
- If you were to invest $10,000, and sell 2 years later for $10,000, your profit would be considered $10,000. So to calculate your capital gains, with a 40% tax rate, would be $5000 x 40% = $2000 tax payable. Even in the scenario where the shares don’t change in price, you will receive a $2000 gain ($4000 tax return – $2000 tax payable).