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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: vireya who wrote (96915)	2/18/2008 1:56:11 PM
From: Tommaso	Respond to of 206150

>>>To repeat, give the shares to kids or like charity, WHEN YOU DIE! OK? <<< That's kind of hard to follow. A couple of people were asking me about AOG.UN and I was explaining that their return-of-capital structure meant that the basis of the original investment was lowered by the amount of the distributions but that until the basis reached zero or until the shares were sold, no taxes were due. I agree with everyone who says that it's hard to understand the explanations of Canadian tax lawyers as to exactly WHY this return of capital is possible. If Mssrs. Harper and Flaherty really wanted to reform something, they could have tackled this. But so far the US IRS has accepted the adjustment that I make when I claim that the income is return of capital. There used to be some utilities in the U.S. that designate part of their dividends as ROC. And two other points about AOG.UN that I have already made: 1. It really does have interests in natural gas and oil. 2. There is a small chance that the dishonest attempt by Harper and Flaherty to change the taxation of trusts will fail or be modified, and that they will recover some of the value lost after the 2006 Hallowe'en massacre. In the mean time, the payments are pretty generous and if natural gas prices keep rising, so will the payments.

To: vireya who wrote (96915)	2/18/2008 3:36:54 PM
From: Logain Ablar	Respond to of 206150

When you die the assets go to the estate and there is a tax on the amount over $2 million. If you have less than $2 million you don't have to do the estate return and the tax basis of the assets to the beneficiaries are the value on the date of death or 6 months after (the estate can choose). In effect the tax on the $2 million is $780,000 but the unified credit is also $780,000. So the assets in the estate are subject to the estate tax BUT end up not incurring a tax and the beneficiary avails themselves of the credit. T is right on the giving the one receiving has the same basis at the one doing the giving.