payable at the time . The tax would be further deferred until your spouse takes money out , or passes away .
Most of us receive this advice at the bank or from our financial advisors at the time we first set up our RRSP or RRIF . However , I often still see individuals who have named a son or daughter , especially in a second marriage situation , without realizing that the tax bill is going to be footed by someone else .
Capital Gains Tax
Another tax liability that arises when a person passes away is capital gains tax . This is a tax on capital property that has increased in value since the day you acquired it . For most of us , the capital
property in question is real estate . Shares of privately owned corporations are also capital property , so business owners need to be aware of who will pay this tax .
The tax is payable on the increase in value . For example , if you bought a cabin at the lake for $ 50,000 years ago , and by the time you die the cabin is worth $ 90,000 , then the value of your property has gained $ 40,000 . Half of that gain is taxable . Your executor would then have to include $ 20,000 ( half of the gain ) on your last tax return as income .
This tax is also payable out of your estate . If you leave your cabin to your son and the rest of the estate to your daughter , the capital gains tax on the cabin comes out of the daughter ’ s share .
There is an exception to the rule that taxes the increase in value of land . Your estate does not have to pay any capital gains tax on your principal residence . This is referred to as a capital gains exemption . If you have a home and a cabin , or a home and a rental property , you can claim the exemption only on one property , that being your usual place of residence . A husband and wife can only have one principal residence between them .
It is worthwhile to sit down with an accountant or estate-planning lawyer to make sure that you are aware of all of the possible tax consequences of your death and that of your spouse . You also want to make sure that you are aware of ways to reduce taxes and to have cash flow available to pay the portion that cannot be avoided .
When Your Car Conks Out at – 30 ° by Robin Carson
Here are a few tips to help you prepare for the off chance that you are stranded in winter .
• Always keep your vehicle at least half-full of gas .
• Dress as if you had to walk to where you are going .
• Keep a winter survival kit in your vehicle . If you become stranded , your car provides shelter , but not much else .
• Stay with your vehicle unless it has stopped in a dangerous place .
Include these items in your survival kit :
• Snowbrush and ice scraper
• Small shovel
• Sand , rock chips , or other traction aid
• Booster cables
• Road flares , folding warning triangles or warning lights
• Gas-line antifreeze
• A hand-crank flashlight , or a flashlight with reliable batteries
• First aid kit
• Fire extinguisher
• Small tool kit or a multi-tool
• Extra clothing and footwear
• Blankets , or a sleeping bag
• Non-perishable energy foods such as chocolate or granola bars
• Bottled water ( Today snow is not fit for consumption .)
• Candles and a small tin can to use as a candle holder
• Matches or a butane lighter
• Cellphone with a charging cable
The candles in your emergency kit will provide at least some heat in your closed car — as well as light .
If you do become stranded and you intend to run your vehicle , make sure the tailpipe is not blocked with snow .
Pushing a vehicle is a great way to have a heart attack . If you can , wait for help .
ALBERTA RETIRED TEACHERS ’ ASSOCIATION News & Views Volume 19 21 , No . 32
13