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Gold/Mining/Energy : Consolidated Magna Ventures (CMV.V) -- Ignore unavailable to you. Want to Upgrade?

To: david f. dempster who wrote (176)	11/14/1997 7:34:00 PM
From: John Fairchild	Read Replies (1) \| Respond to of 380

You better talk to an accountant about that one. My shares are in RRSP's already so I can't use as a tax loss. John

To: david f. dempster who wrote (176)	11/15/1997 3:31:00 PM
From: Richard Saunders	Read Replies (1) \| Respond to of 380

david/ been a long time lurker....... careful with your "strategy". Caveat - I'm not a tax-planner or accountant so make sure you get professional advice, etc........ Anyways, about transferring stock from a personal account to a registered retirement account (in Canada). The thing is called a CONTRIBUTION IN KIND and the tax folks view the date of transfer from the one account to the registered account as the date of the DEEMED DISPOSITION (sorta' sounds like a friendly dog or something....). Anyways, the DEEMED DISPOSITION. If the transfer from the personal account to the registered account results in a capital gain, guess what? You pay capital gains tax by adding the gain to your personal tax return in the year that you transferred the shares. On the other hand, if the transfer results in a CAPITAL LOSS.............. guess what? You are not able to declare the capital loss and use it to offset any prior gains or add it to your capital loss pool. The tax folks have got the best of both on this angle.......... capital gains paid if deemed disposition yields a capital gain; unable to use capital loss. The other little detail you might want to keep in mind is SUPERFICIAL LOSSES which basically indicates if you sell a stock in a personal account for a capital loss you better make sure you (or a related party - ie. spouse but not kids or parents) haven't purchased the same thing either 30 days prior or 30 days (calendar) after your capital loss sale. The capital loss can't be used however it will be added to the ADJUSTED COST BASE of the other purchase transaction which created the SUPERFICIAL LOSS. Hopefully the above isn't too confusing.............. there was an article re: Superficial Losses a few Saturday's back in the Globe and Mail. Happy hunting.............. disclaimer: curently underwater too with this puppy. just re-read above - the capital gain issue, the amount is taxed at capital gain rate...... some of the words above might make you think it's added directed to earned income, it's not. One other detail - the transfer of contribution in kind. Price used is usually the last price on the date of transfer although I've heard there's a bit of leeway ("reasonableness" is the issue you'll be arguing) with prices if on the date of transfer the price has shown some range. For a fairly illiquid trader with often wide bid/ask ranges it is possible to "move" closing prices by making a well-timed trade near end of trading. Five or 8 cents spread on a smaller stock can make a substantial difference to valuation of deemed disposition....... Next question that probably needs to be asked is that if a RRSP is for "retirement" purposes then do you really think it's best strategy to be filling the registered account with illiquid (often majorly risky) penny-stocks? Just a question............