The fun of the Transaction

Have you enjoyed a "Transaction" lately?
A Transaction is an event or series of events, usually very positive and uncommon, resulting in a special tax liability. It could be a sale of a business or real estate. It could be a year where one receives both pension and a salary, or salary and a termination payment.

In other words: unusual income and unusual tax liability mean  you can save tax today and reduce the liability come April 30 and your installments for 2012.

"The Transaction results in extra income
and thus an opportunity to squirrel some away
in a charitable account for future use."

So what can you do?

• Donate the extra funds to the JCF to set up a FAMILY FOUNDATION where you will direct the charitable funds to charities of your choice. Always consider donating an appreciated marketable security.
  Benefits: Save the tax today, when you need it, to pay donations in the future.
  
  
• Set up a CHARITABLE REMAINDER TRUST at the JCF. The funds will be invested and the income returned to you annually until death (and if you like your spouse). At death the trust capital will be used to support the charity (ies) of your choice. The advantage: you receive a donation receipt today.
  
  
• If your corporation has made a significant gain, explore the GIFT OF PREFERRED SHARES.
  Results: Combined with insurance, this gift, although quite complicated, achieves the best short-term tax results.
  
  
• Donate an old INSURANCE POLICY prior to December 31 to the JCF. If due to previous premiums paid the policy contains real value, a tax receipt will be issued by the JCF for this value.
  Surprisingly, usually a real tax benefit.

A note about deadlines

• Our office is open to December 24 to accommodate the setting up of end of year tax plans.

• If you're a fund holder you have until December 15 to direct donations to be made in December. Donation requests made after that date will be moved into the January check run.

• You may donate appreciated marketable securities to the JCF right up to December 31, but ensure that your broker has a JCF account set up to ensure the transaction occurs on time.

Happy Chanukah, Happy Holidays and Happy Transactions !

Questions? Need more info?
Feel free to e-mail me.

Robert Kleinman FCA