Capital gains tax strategies change under new tax rules + MORE Oct 26th

Q: My wife and I have been married for 14 years (my first wife passed away). Janie is not working outside the house.
Here is our financial situation:
Walter: age 63, still working full time
Janie: age 55
Salary: $150,000 annually
Benefits, but no pension plan (never had one)
Own our home: $250,000 mortgage, house value $850,000
Walt RRSP: $350,000
Janie RRSP: $100,000
As well, I receive $525 monthly survivor from CPP. We have about $10,000 in savings and another $6,000 in a TFSA. Other expenses are typical: car loans with monthly payments, taxes, utilities, but no other real debt. Kids are gone, and no one on the payroll!
I may be forced into a “retirement” position in April of 2017 as my current contract expires with the company I work for and the indication is that we will not be renewing the agreement. If I cannot find suitable replacement work between now and then (difficult to find a “career” at age 63), I may choose to retire.
Can I retire based on the information I have offered?
—Walter
A: I’m going to try to do some retirement modelling for you, Walter, given the information you’ve provided…

Former federal government employee Tony Miller earns a steady return by loaning out his RRSP money. (Jessica Deeks)
Born and raised in the east-end Orleans area of Ottawa, Tony Miller married an amazing woman, fathered two wonderful children and went to work for the federal government. But when he lost his job in 2013, he was faced with a predicament.
“I had a bit of money to play with from my severance package, but didn’t want to stick it in my RRSP,” says Miller. “I just didn’t like the returns I was getting on the mutual funds and stocks I held.” At the same time he was retraining to become a realtor and liked the idea of property investments, but didn’t relish the idea of getting involved in property management and tenant issues. “I wanted a less hands-on property investment.” So, Miller decided to imitate the banks and start lending out his own RRSP money in the form of a private loan. “It gave me much better returns,” says Miller, who calculates the annualized net return on his private loans at 10%…

 

For most Canadians, the new requirement to report the sale of a principal residence will be nothing more than a compliance exercise—but one shadowed by the threat of unrestricted audits and sizeable penalties. To help you negotiate through the new reporting rules, please see the 8 questions you have about principal residence tax rules. But for families with more than one property as well as real estate investors, this new requirement may introduce a few wrinkles into the more common capital gains strategies used to minimize the amount of tax owed to the CRA.
To help you maximize the capital gains tax strategies under this new reporting requirement, here are eight tips and suggestions.
Read more: Feds close housing tax loophole »
Tip #1: You must remember to report each sale
The new rules, announced in early October 2016, will require you to report every single property sale on your tax return. That means in your 2016 income tax return (due sometime in April 2017) you will need to report the sale of property, even if you don’t end up owing tax on the sale…