Wednesday, November 16, 2011

2011 Tax Planning Tips

Tip 1 - Tax loss selling

The deadline for selling securities this year is December 23, 2011 if you need a tax loss to offset a capital gains realized earlier in 2011. Be mindful of the "superficial loss" rule when you sell an investment to realize the loss. If you buy the investment back within 30 days, the CRA can deny the loss and add it back to the adjusted cost base of the repurchased security.

Tip 2 - RRSPs / RRIFs / Annuities
Have you turned 71 in 2011? If so, you must convert your RRSP to a RRIF or an annuity before December 31, 2011. In addition, any final RRSP contribution must be done by December 31, 2011 as well. Talk to me, if you want to make an over contribution to your RRSP for this tax year.

If you have a child or grandchild who turned 15 in 2011, December 31, 2011 is the last chance to contribute to their RESP (if they do not have one already) and be able to collect the Canadian Education Savings Grant (CESG). The child must have a minimum of $2000 in their RESP by the end of the year they turn 15 in order to collect the government grants.

If you child is over 10 and you have unused RESP contribution room, consider making a contribution in 2011 to collect the CESG.

Tip 4 - Investment expenses and deductible interest
To deduct these expenses in 2011, they must actually be paid by December 31, 2011.

For more tax tips or clarification on these, give me a call.