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Discussion Starter #1
Hi Everyone,

I was a long-ago contributor to this forum and have returned in the hope of leveraging your collective expertise in order to find the answers to some huge (and challenging) wealth management questions relating to my mom who is doing extremely well for herself following my dad's early death 6 years ago.

I'm a CPA and long-time personal finance enthusiast and look forward to some quality discussions.

All the best,

Matt (Harken)
 

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I'm not sure that poster, a CPA is serious or what ... but then he's from Quebec (or was)????
 

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Discussion Starter #4
I'm not sure that poster, a CPA is serious or what ... but then he's from Quebec (or was)????
Hi Beaver,

Yes, of course I'm serious. Why would I not be? And no, I'm not from Quebec - why would you think that? I have actually lived in Ontario my whole life.

All the best,

Harken
 

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Discussion Starter #5
Welcome to the forum. Glad to hear your mom is doing well. If she is doing that well maybe we should be taking her advice.
Thanks Rusty! Most of her success is due to the fact that she just works damn hard - adding value to her condo by renovating it top to bottom by herself and building her business with a crazy amount of sweat equity.

As for her investments, I can take some credit for that but I was very lucky to have gone all in building her dividend growth portfolio starting in 2011 which was a volatile time full of fear in the market, but in retrospect was a great time to get in. Most of the stocks I purchased for her are US stocks and were purchased at very low prices when the CAD was near par. For example I purchased 50 shares of V at a (pre-split) price of $117.70 in March 2012 when the CAD was at about 1.01 - an investment of $5835. This position is now worth $47,500 CAD for an insane capital gain of over 500% in 7 years. This good fortune would be nearly impossible to replicate in today's investing environment. I usually go with some of Buffet's simplest advice - buy when others are fearful, and it's better to buy a great stock at a good price than a good stock at a great price. Other than that, I have sold the dogs and kept the winners and that has paid off really well.

I have posted a thread that shares all of the details of my mom's situation and some of the issues I need to help her tackle. It seems to be stuck in moderation however...hopefully it will be posted soon.

All the best,

Harken
 

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Hi Beaver,

Yes, of course I'm serious. Why would I not be? And no, I'm not from Quebec - why would you think that? I have actually lived in Ontario my whole life.

All the best,

Harken
... I had thought you posted "Quebec" in your first post but it disappeared (possibly edit). But now you confirmed you're from Ontario ... all the better.

As for your not "seriousness", your first post have alot of contradictions...first, you're a CPA, you need help for your mom (presumably a financial topic) and yet she's doing extremely well ... which way do we readers read?

Anyhow, CMFrs will wait for your subsequent explanations to see if any help can be provided. Welcome to the forum.
 

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Hi Beaver,

Yes, of course I'm serious. Why would I not be? And no, I'm not from Quebec - why would you think that? I have actually lived in Ontario my whole life.

All the best,

Harken
You’ll learn that there are certain people who just make things up. Some do it so they don’t feel inadequate (“no one can do that. You're a liar.”). Or because they feel it gives them control (“the gom are on a rampage”). It just because they don’t have a clue (“get a union job and give me ubi”).

If it gets to you, there is an ignore poster button I’d recommend. I avoided using it for years, but it made the board a lot better after I used it.

Edit: I guess I forgot to mention there are also some who believe you need to be attacked a certain number of times before you’ve “paid your dues” and can receive advice. See below.
 

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...
If it gets to you, there is an ignore poster button I’d recommend. I avoided using it for years, but it made the board a lot better after I used it.
... how's that when you're still griping? Seriously, do you need to advise a new poster when he hasn't paid his dues here.
 

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I think your last post answers your own question. “Paid his dues” indeed. Oh, and you’ll note his original posting was never edited. The board software notes when it is.

To answer your question I still use the button sparingly. Trying to give some people a chance for redemption...
 

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^ Not to further hijack the poster's thread...I digress to you JAG.
 

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Discussion Starter #11
"As for your not "seriousness", your first post have alot of contradictions...first, you're a CPA, you need help for your mom (presumably a financial topic) and yet she's doing extremely well ... which way do we readers read?"

Yes, I'm a CPA but don't practice as a private accountant and am not specialized in some of the areas of complexity that are involved. Part of the issue is that she has done very well, which now makes it more important than ever to implement strategies to preserve the wealth she has managed to build up while minimizing taxation risks. As I've mentioned, I wrote a lengthy post that details her situation and the issues I'm trying to address but it is stuck in moderation (since last Friday).
 

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Yes, I'm a CPA but don't practice as a private accountant and am not specialized in some of the areas of complexity that are involved. Part of the issue is that she has done very well, which now makes it more important than ever to implement strategies to preserve the wealth she has managed to build up while minimizing taxation risks. As I've mentioned, I wrote a lengthy post that details her situation and the issues I'm trying to address but it is stuck in moderation (since last Friday).


i don't know if this suggestion would be suitable for your family member, but it's a suggestion that works for every investor fortunate enough to have significant notional capital gains on paper. Suggestion works best for those who are still young enough to carry the procedure forward, every year for a number of years.

1) select a quality stock with large capital gain on paper, a stock that one intends to keep. The goal here is to raise the cost base. This will benefit not only the eventual estate disposition, but also any total disposition an investor might make during his or her lifetime..

every year, sell one to a few board lots for a small capital gain that will not push taxpayer into a higher tax bracket.

2) at the same time, replace the sold stock with new market purchase at current market prices (by definition, these are high prices)

the cost base will automatically rise slightly. Repeat the following year & every year thereafter.

eventually, when final disposition upon death occurs, there will be much less of a capital gain than would have been the case if the treated stocks had simply been held forever, with no adjustment whatsoever to their cost base.

3) a double bonus occurs when the disposed stock is donated to a charity instead of sold outright into the market. The gain inherent in the donation will not be taxed, as you know, & the rise in cost base will be much greater.

i have seen capable CPAs in this forum who say they advise their clients to engage in this strategy when applicable. Strategy works best for clients who start, say, in their early 60s & carry on with small lower-taxed capital gain sales each & every year in a disciplined manner.

4) there is a tiny CG advantage to buying the replacement stock *before* one carries out the sale or the charitable donation. In any event the investor aims to buy the replacement on a dip or downtick, then sell or donate on a slight rise in price. Investor wants at least the 2 commissions to be paid for!
 

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Discussion Starter #13
Thanks for the suggestion humble_pie. All of her investments are in a LIF (formerly a LIRA) which is a locked-in retirement account, which means that all of her investments are sheltered from capital gains for the time being. The issue is that she currently has a growing business on top of earning 60% of my deceased father's pension which means that her income is higher than ideal for making withdrawals from her LIF, which is also subject to a minimum and maximum each year. Basically, she ok withdrawing the minimum and letting her portfolio grow. The last few years thanks to the bull market we've had, her portfolio is outgrowing her withdrawals as dividends alone almost cover the minimum. I don't know if this will continue to be the case, but the longer it goes, the more will need to come out of that account, while there is also the ongoing risk of her dying unexpectedly and the full value of the account being liquidated and taxed as income in the year of death. It's a careful balance to figure out, with the future of her business playing a major complicating factor in how it should be managed.

I've now posted a lengthy thread that explains all of the issues and some of my thoughts that I've managed to gather thus far. It's in the Retirement sub-forum as it mainly concerns retirement issues, even though my mom my not retire from her small business (e.g. sell it) for another 5-10 years or more.
 
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