Joined
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6 Posts
Hi everyone,
As a newcomer to this forum, I'd first like to say thanks for all of your informative posts and blogs, a number of which I've been following for some time now. The collaboration is helpful, constructive, and appreciated.
I have a question concerning the tax breaks given for charitable donations and RRSP contributions. Consider the following -- how much would I have to give to a) a charity, or b) to RRSP, or c) to both, to minimize/eliminate capital gains taxes in the following stock investment situation:
Initial investment: $3000.00
Sale: $12,000.00
Location: Ontario
I realize that you are taxed on 50% of your capital gains (i.e., capital gains being the net "profit" once your initial investment and brokerage costs are subtracted). For ease of calculation, and to allow a financial buffer, I assume the highest possible taxation rate (i.e., approx. 47% in Ontario...and I round it to 50%) which basically means that 1/4 of your profit will actually be tax that you have to pay (50% tax on 50% of the net profit).
Given the case above, I would have to pay approx. $2250.00 (50% of 50% of a profit of $9,000.00) in tax as a result of that sale transaction. Now, how can I allocate the profits, and in what proportion, to a charity and/or RRSP to minimize/eliminate the tax liability of $2250.00?
Thank you in advance for your help!
As a newcomer to this forum, I'd first like to say thanks for all of your informative posts and blogs, a number of which I've been following for some time now. The collaboration is helpful, constructive, and appreciated.
I have a question concerning the tax breaks given for charitable donations and RRSP contributions. Consider the following -- how much would I have to give to a) a charity, or b) to RRSP, or c) to both, to minimize/eliminate capital gains taxes in the following stock investment situation:
Initial investment: $3000.00
Sale: $12,000.00
Location: Ontario
I realize that you are taxed on 50% of your capital gains (i.e., capital gains being the net "profit" once your initial investment and brokerage costs are subtracted). For ease of calculation, and to allow a financial buffer, I assume the highest possible taxation rate (i.e., approx. 47% in Ontario...and I round it to 50%) which basically means that 1/4 of your profit will actually be tax that you have to pay (50% tax on 50% of the net profit).
Given the case above, I would have to pay approx. $2250.00 (50% of 50% of a profit of $9,000.00) in tax as a result of that sale transaction. Now, how can I allocate the profits, and in what proportion, to a charity and/or RRSP to minimize/eliminate the tax liability of $2250.00?
Thank you in advance for your help!