4.21.2007

Tax Rebate and Debate

Alright!It's time to use my powers for good once again! (Umm.... I sure hope I never started using them for evil) I know I'm supposed to be writing for kids but once in a while adults really need my help to. So all you kids wanting to make money, I'm warning you, step back as this could get confusing!


Dear Mr. Munnybagz,

I hate paying taxes. I have used up all my RSP room so that is not an option. Someone has told me about an investment called flow-through shares as a great way to reduce my income tax. I am not afraid of taking any risk but wanted to hear your thoughts on this type of investment.

Thanks,

Gloria


Well Gloria,

I have to admit that I just learned about these shares a little while ago, but I am doing some more research as I speak. The first thing that jumped out at me is that you can claim these on your tax refund and they will count 40 percent of what you spend on them towards your taxes. So if you invested $10,000 and sold for $10,000, you will have 40 percent go to taxes, but you get 20 percent of that back. I also believe that it has something to do with what tax bracket you are in, and the higher you are the bigger break you get. Unfortunately, these shares can only be bought in oil and mining. I would personally recommend oil for short term and mining for long term. Anyways, back to your question, Gloria. Yes, these do sound pretty good and I know I would buy them. Props on taking a stand for your money and also for maxing your RSP!

Munnybagz

2 comments:

MillionDollarJourney.com said...

Hey Kiddo! Just wanted to say congrats on starting so early on your financial endeavors. You will certainly come out ahead.

All the best,
FT

Munnybagz said...

Thanks, and thanks for the post! :)