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Gold/Mining/Energy : TAXES, TAXATION, TAX and Canadian stocks -- Ignore unavailable to you. Want to Upgrade?

To: Sans Souci who wrote (188)	7/31/2000 8:25:34 PM
From: Kayaker	Respond to of 548

Bottom line -- how do you take a lump sum of RRSP assets out early, without taking a huge tax hit? Not what you want to hear, but my best advice to you is to resist the temptation.

To: Sans Souci who wrote (188)	7/31/2000 11:52:57 PM
From: Stock Farmer	Respond to of 548

My inexpert, misinformed, naive and untutored understanding is that there is NO WAY to withdraw capital out of an RRSP other than as earned income (e.g. you pay tax at full marginal rate). You might be able to adjust the marginal rate by clever schemes such as earning less money... but that's counter-productive. I have a very foggy recollection of a similar discussion with my accountant years ago. My takeaway was that me drawing on the capital in my RRSP and repaying loan interest was equivalent to investing my RRSP in the money market. His advice was (a) it's possible - to a limited extent, (b) it's a lot of risk and bother ("arms length" requirements), and (c) it's better to invest RRSP in equity markets which have higher expected rates of return than the money markets. In retrospect, this has certainly been true. That left the question whether or not there is an opportunity to invest my RRSP in an equity opportunity - such as me.com. Again, his advice to me was that my judgement of success was unlikely to be superior to that of the venture capital community, and that if I could convince them I have such a great idea then it makes (b) above easier too. Times may have changed somewhat since then. Equity markets are way hot right now and quite possible rate of gain may turn negative - so your question is a good one. Someone out there should know the tests a self-directed RRSP investment must satisfy? Can I buy shares in my son's lawn mowing service?

To: Sans Souci who wrote (188)	8/1/2000 1:32:57 AM
From: russet	Respond to of 548

If you leave the country, there is only a 25% withholding tax if you cash out your RRSP. Another way is to start a business that should make money but doesn't in most years because you have a lot of tax deductible expenses,...like racing something (boats, horses, whatever). The losses will wipe out the money you take out of the RRSP, and you will enjoy your life if you plan your races in nice places. This is what the rich do, and if you have a decent accountant (very hard to find, most aren't, or they would be doing it rather than working for you) you will too. Only the rich and the poor get to sit around and watch the world go by. The middle class pay all the taxes and work harder than the rest. Time for a middle class revolt. Think of all the hundreds of millions that are spent on all that pomp and ceremony bullchit in Ottawa and abroad. Are we all children that need to see that crap to believe the chits in Ottawa are doing a good job. A crapload of our taxes are spent on that chit. Everyone should live in Ottawa for a few years and look at the waste. Governor Generals, lots of official residences, swearing ins,....someone should be swearing alright. We are being fleeced good, but no one will do anything about it. Any person you send to Ottawa, gets so many perks, they'd be a damned fool to give them up. We get what we deserve. Act like a fool, and get treated like a fool,...unless you do what the rich and poor do. Put your hand out, get a good accountant, and enjoy life for a change. Just the rants of a squished hamster. Pay no attention. Have you seen and heard this site (ggggggggggggggg). http://www.hunglikeamoose.com/

To: Sans Souci who wrote (188)	8/1/2000 8:10:06 PM
From: Crocodile	Read Replies (1) \| Respond to of 548

There is one way that I believe that you could use your RRSP to buy a house. I think that you can set up a registered self-directed mortgage and loan yourself the money to buy the house at a rate which is accepted by Revenue Canada. There is a chapter about setting up this kind of mortgage in Gail Vaz-Oxlade's "RRSP Answer Book". I have the 1995 edition. You might want to pick up a copy... some interesting info on RRSP's in a very simple format. I imagine there might be a new edition around and that some of the rules might have changed. croc