Optimism #73 - April 18, 2024

Dear clients and friends,

With respect to company insiders, they seem to be buying in the mining and materials sectors at firms such as Chesapeake Gold, Jaguar Mining and selling oil and gas.

And there is some buying at Savaria Corp (they make those stair elevators), Dream Office REIT, Atkins-Realis (formerly SNC-Lavalin), and Enghouse, a Canadian technology firm.  What to make of it?  I wish I knew.

More and more we are being forced to rely on using ‘My CRA’ for tax stuff.  They have apparently made it easier to access.  Here is an article:  (word version attached as well).

Excellent idea from Rob Carrick at The Globe and Mail about having a bank validate a POA.  Such documents have been used maliciously in recent years so banks may resist.   

“A power of attorney for property is a way to authorize someone to make financial decisions on your behalf, and it’s almost as important as having a will. To ensure a POA will be accepted by a bank or other financial company, have it validated before it’s needed.”

As you know, the Federal Budget came out yesterday.

Capital gains, only those over $250,000 in a calendar year, will be taxed at a higher rate, after June 24th, 2024.  This is for personally owned stuff.  For corporations including holding companies, there is no grace period. 

It seems they are hoping owners who planned to sell investment properties or second homes with large capital gains will sell, creating revenue and possibly more housing supply.  For people with cottages, ski and other second properties, this is more like an estate tax.

Will it be like the 1990s where the tax rate increased but was lowered a few years later?  Should you sell soon and trigger gains at the lower rate?  I’m happy to be a sounding board.

If you spend more than about 4 months a year in the United States, you will want to be aware of filing an 8840, or Closer Ties form, with the IRS.  The intent is to clarify that you are in their country for personal reasons only, not business and have no desire to be deemed a resident for tax purposes.  Here is a link to it.  It’s a bit confusing. I am happy to help. Here is a link to it.  It’s a bit confusing. I am happy to help.

Income tax filing is due at the end of April, and so are amounts owing.  Self-employed persons can delay up to June 17th, but tax owing is still due April 30th

And a reminder to inform your tax preparer if you own anything outside of Canada that you paid more than $100,000 Canadian for.  They will complete a T1135 as part of your return.  Fines are large for those who forget.

“I put two children through University.  Unfortunately, they were my stockbroker’s children.”

Happy spring,
Derek Moran