Making sense of the markets this week: August 28 + MORE Aug 31st

With retirement saving on the line, cryptocurrency is still too speculative for your average investor due to its underlying lack of fundamental values

During my working life, I transferred non-registered investment shares through a spousal loan to my wife (a stay-at-home mother). At the time of transfer, I declared the capital gain and paid the corresponding tax on the gain on the difference between the FMV (fair market value) and the ACB (adjusted cost base). We also set up additional spousal loans from time to time from savings from my executive compensation.

Now that I am retired and can split my pension income with my wife, there is no more need for the spousal loans. Should we keep the spousal loans going? She pays me the prescribed rate interest annually, and I declare this on my income annually. What is the best strategy to have the spousal loans reimbursed to minimize taxes? The market value of the investments, including non-realized capital gain now exceeds the loan amount?

I have seen advice on setting up a spousal loan for investments, but I can’t find much on the need to reimburse one and how to do so.

—Ghislain

How to set up a spousal loan in Canada—and what not to do

Thanks for your question, Ghislain…

Kyle Prevost, editor of Million Dollar Journey and founder of the Canadian Financial Summit, shares financial headlines and offers context for Canadian investors.

Banking on stability and caution

Canadian investors love their banks. Year in and year out, banks provide dependable dividend growth and solid long-term share price increases as well. They also make up a massive part of any Canadian index fund, as well as the bulk of Canadian pension funds.

So, when the banks pull back the curtains to reveal how business is doing, we take notice.

With a set of mixed results, the main takeaway appears to be that the Big 6 (BMO, CIBC, National Bank, RBC, Scotiabank and TD) looked at the economic storm clouds on the horizon and decided to batten down the hatches. 

By provisioning more of their profits for default loans, the news wasn’t as good as recent previous quarters. That said, these conglomerates continue to tick along cautiously, dependably spinning off free cash flow…