dave@lsuc.uucp (David Sherman) (12/11/87)
The $1,000 investment income deduction will be going away
effective 1988 (assuming Tax Reform is enacted as proposed).
That means that all of your bank deposit interest and similar
income will be taxed.
If you are not using the full $1,000 exemption in 1987,
consider whether you can recognize extra income in 1987
when it is exempt rather than leaving it to 1988. For example,
accruing interest on bonds must be recognized every three years,
but you may at your option report it each year. Or you might
have a term deposit or bond which you are planning to cash in
1988 but can be cashed earlier witout interest penalty.
Incidentally, the tax changes (most technical stuff) from
the February 1987 budget have just gone through Parliament
and will be given Royal Assent shortly (that's Bill C-64, which
also includes various tax changes announced by press release
during 1986-87). The tax reform proposals of June 18, 1987
have yet to appear in the form of draft legislation, though
it's rumoured they'll be out in a few days. After that, the
time it takes them to be enacted is anyone's guess. (And if
the government calls an election next spring and they haven't
enacted the legislation before Parliament is dissolved, they
might never be enacted at all.)
All of which make tax planning kind of an interesting exercise...
David Sherman
Barrister & Solicitor, Income Tax Consultant
Toronto
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