TAXES, TAXATION, TAX and Canadian stocks Message Board

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Gold/Mining/Energy : TAXES, TAXATION, TAX and Canadian stocks

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To: Michael Dean who wrote (247)	11/7/2000 10:54:11 PM
From: Jordan Levitt	Read Replies (3) of 548

Let me get this straight...you take money out of your RSP, pay a fifty percent tax, re-invest the reduced amount (you now need a 100% return to get EVEN), give up the advantage of a tax sheltered environment????...THIS IS NUTS !!!!! If you want to hold more US stocks in your RSP just do it. You pay a 1%/month penalty on the amount over and above the allowable limit in terms of book value. This is way cheaper. You can also use clone funds(rsp eligible foreign funds) to get to 100% foreign content. BTW, it does NOT take 20 years for the tax shelter of an RSP to be an advantage. You win as soon as you sell anything and then re-invest the entire amount. Play around with an excel spreadsheet sometime, or better yet, read the Warren Buffett Portfolio...it makes this point extremely well with regards to the effects of taxation upon investment returns. All of this and you also need to calculate in the future value of all of tax deductions that you give up by no longer contributing. This future value would have to be deducted from your already depleted investment returns! Oiy vey ! To summarize...there is absolutely no way to be ahead by removing money from an RSP for investment purposes. you would have to repeal the laws of mathematics.

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