Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jordan Levitt who wrote (250)	11/8/2000 1:45:22 AM
From: Jim Bishop	Respond to of 548

Comments on this, I haven't tried it...but ?? Message 13056397

To: Jordan Levitt who wrote (250)	11/8/2000 1:29:16 PM
From: Michael Dean	Read Replies (2) \| Respond to of 548

Thanks Jordan! You are of course correct. In reasoning that your capital gains will be taxed fully as income if left in the RRSP and at half that rate if accumulated outside, I forgot one factor .. you have only half the capital to invest to start with. Assuming $100K in RSP vs. $50K outside, invested purely for capital gains (no distributions) at 16% for 10 years, I come up with $220,571 vs. $177,929 after taxes paid. A significant advantage to the RSP even at only 10 years. Oop's. I still contend that a major RRSP advantage is that deductions are at your marginal rate, and withdrawals will be at close to average rate which can be significantly lower if your other income is low. I also believe that there are other reasons that one might want to cap an RSP at some level (say $1,000,000 for example) and then begin to build a non-registered portfolio or acquire hard assets. Thanks again, Mike

To: Jordan Levitt who wrote (250)	11/8/2000 5:12:44 PM
From: Robert Salasidis	Respond to of 548

Completely true for the most part with a few exceptions. RRSP compounding with interest and capital gains tax free are a great advantage in your younger years. Nearer to retirement however, interest gains should be preferentially sought after in an RRSP vs capital gains (so some transferring in/out of securities vs bonds would be required. This is because capital gains are taxed at a 50% inclusion rate outside the RRSP but will be taxed asordinary income on withdrawl of funds from an RRSP. At what poinmt in life one would need to start making a transition (of capitl gains outside, and income inside) is variable depending on how aggressive one's portfolio is, but a rough estimate would be about the time the portfolio would take to double twice (400%). For most conservative portfolios that would be about 15 years.