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- Not given wide proud-ace in the furor over moat revelations about illepl break-ins, cover-ups ad wire- tapping of politicians by the Royal Canadian Hunted Police is this mock. er: New evidence that the Mounties . have been getting confidential tax titeg from Revenue Canada and using them for their own investigations., Testi- moerytottoemseoraryeetAiit"tf hearing mould provide fresh aggtggtttgt'- ition for the Conservatives and New Democrats, who are claiming the gov- ernment has lost control of the RCMP and are demanding the resignation of Solicitor-General Francis Fox, writes Philip Teasdale in The Financial Post. The question this incident raises: is that only the tip of the iceberg? The Income Tax Act guarantees confiden- tiality of tax information and sets strict _ limits on who should have access to such information; The purpose is" to prevent a taxpayer's files from being 'i'iiiiaiiriiiriife mammgea Ehmarh it (troott But there is a"best"time. _ By pre-arranging your funeral now. with us. you can lessen the burdens forced on loved ones. And relieve them of emotional dress and financial worries that are often the result of last minute decisions. Talk it over. Now. Without obliga- tion. in confidence. and with confidence. Ugg, This symbol is yoiir assurance that wv. as-an OFSA member. adhere strictly to thr, association's‘Code of Emma! Practices". FUNERAL HOME LTD. Persons wishing to vote must reside within the constituency and hold a current membership card. Please contact Mrs. E. Dyck (886-1384) by 8 pm. Monday, October 24. 1977. mm www.mwiéaow 19.1011 Waterloo d Federal Progressive Conservative Association PHONE 745-8445 171 King St. s.. Waterloo Peter Woolstencroft (679-09 12) IttyWlt0iTll0til MEETING Don Downie (664-2658) For further information Wednesday. October 26, 1971 BINGEMAN PARK LODGE- please contact 8 p.m. or "atsora.rr-eathtt.ttqtt" aa.etimto'tazes.mritrgtbet-r- intrrottusatsertaintrtrr1tttt"tgt"r tiiaettvttiesotRoraLunertear"ttt"rrr. a trteteidtAmsed Wuhan-1y. a (can: (a; irteesttett1tr, Ban-d WIS. to -detaiuottoeeret9et- mum RevemeaesdttseRCMP mm becoming prstttiehmtMettge. The investigator said the agreement. sign. ed in April, 1m, allowed Revenue to Ev; a; rick ansfidmtial tax Jn- Service Association Ontario Gidtseaitaeddomme- , Only rarely does the l ordinary individual get ‘much of a'choice when it _ comes to income lax l planning. Bankruptcy - a rtewrlrejirtiit.s., (?tt:l'!'.!f....t. Do you realize you might be able to save tax by declaring income you don't actually' receive? , Because the interest doompounds -- it's left "in the bond" and not pnid out -- John doesn't actunlly get this $400 each year. 'e By Owe Mi, CA 'rhehonestdetttorwttoamtractssomauydebtsthat hehasnoreasonatsiettopeottteintratets?repartteean go bankrupt and gain, financially speaking. a new lease onlife. . . . iiamanrpemato11owttietrrirasttrttor1'u? 1973 there were 6,129 bankruptcies in Canada. By was. this figure had climbed to that. with 6.652 of these in- Ontario - 46% of the national total. No fewer than tt,60t were personal bankruptcies. and again 46% (me than 5,300) were in Ontario. Present indications are that" bankruptcies in 1977 will be even higher than last year. Members of The Institute of Chartered Accountants of Ontario answer your questions in Dollar Sense. Mr. Manski is with Dunwoody & Cog, Toronto. - What happens when a person "goes bankrupt?" In return for the relief of having his debt burden lifted from his shoulders. the bankrupt person must surrender all of his assets” a trustee. who in turn will administer and sell them on behalf of the bankrupt's creditors. ‘Of his total, assets, the bankrupt is allowed to retain clothes valued up to $1,000; household effects tfurniturel. valued One of those rare in- stances involves Compound Interest Canada Savings Bonds. Here's how it works (the figures have been trim. plified in the following hypothetical examples):~ V‘lllw up W (1,“. "‘1“!le w-avvw '_-'----"'"'. ___"--'--- up to 82.000, and "tools of the trade" (mechanic's or carpenter's tools used in egrning a living), also valued up john Jones btiyts Com- pound Interest Bonds which yield $400 interest a year. Public can savemore money - x by declaring t1t1tf!'tpnal income ' And so he doesn't even think about income tax -- until his bonds mature at the end of l0yeara. He collects his 84.000 accumulated interest and, to his shock, suddenly realizes he has to declare that 84.000 as income and prolzably pay tax on It. Sun Smith buys the same bonds, with interest compounding at 34-00 a year. But Sam declares this 8400 as interest income each year -- even though he doesn't collect the money. Because of the 81,000 interetst-divident deduction on the tax return, he pays little or no tax (depending on what other interest- dividend income he has. 'orisam.ifttr6t+dhse-_t- 'esttgatttrq an Mt- pin: the h- -Hasrtett-rt+erertir- eddrtrgse."tetbraeemr-ertttrut Ameritsartt-eHttragett"ebe- lined. the RCMP has been abusing mmwymm of Pam Kerb any. who was Re-mi-ter-r-., ai'iikiG li% pm moi has out» am ttat of any other Integrity- In the tenth year, the bonds 'muture and Sam collects 84.000 interest income. But cs usual, all he declares is 8400, having already declared 83.600 over the previous nine years. John declares all his 34,000 bond interest in one year, and pays quite I bit of it to the tax man. But Sun declares his 84,000 bond interest at 3400 a year over IO years. and pays little or no “I. W bteb- h ttsetdrrs_ot John Jones' approach is called the cash method of reporting income: You pay tn when you get the cash. Sum Smith's approach is called, the accrual method of reporting Income: You pay tax as your income accrues (builds up), even though you don't nctually get the money It the time. This year. for the first time, the government is offering two types of Cnnadn Savings Bonds: Regular Interest Bonds and Compound Interest Bonds. If you buy Regular Inter- est Bonds, you'll be sent your interest each year, or you can have it deposited directly into your bank 'aoooum. Either way, you have no choice as far as income tax goes: You'll have to declare the interest the year you get it. But if you buy the Com- pound Interest Bonds, then you have the choice as to how you'll declare the interest income -- either each year (13 Sam Smith 0....4IIOIIOOO. By Mike Grenby 1032.000. "'ttmisoftttetrade" iiemtointeniretatioa, andmyjnckfleanautomohileifitisabohntely,” mmmaflvinanaddifionlifeWm 7a1rei'iiiGGLiiier%iremartteeet?ireeidedfr beneficiary is a memberof thtsttar&mpt's immediate family. Pension plans. too. may be retained in some circumstances. - . _ Anodierthingthebankruptisalwwedtoretainishis salary, FroFiiiiiUileearvstyuAe.need.tP,yfi1ttefet tainareaaonablestandardofliving.1'hisisanimport-‘ i'iiiiude'iiirtare8er.ttn.t.e1f,etsthet'""r'ta"rr mlchanceat financial rehabilitation. Thebankmptisnotreleasedimnhisdebts,however. foraperiodoffromthreetosixmontlmdnringvhich time the trustee will review or investigate his financial affairs, and will report to the can'twhetheror not the bankruptcy resulted from amt practices. The trustee's usual fee (regulated by the federal Gov- ernment). for administering a banknmtcy is $500. How- ever, in casesihere thedebtorhasa very low income, and few seizable assets. a government-administered bank- q ruptcy may beavailable ata feeof only 850. _ V . . . . __-a-s, p.-,.-.". ant-mic film. lupw, "I“, Wu'uwv-v -eM..--_ --' - ,1 _ The increase' in bankruptcies strongly mats that more Canadians are viewing the process not " financial suicide. iiuiasrartr_1eeAeLetettet22i,!t: did) or all in the last year (as? John Jones did). I How do you decide which . approach is right for you? You must look at what your tax bracket is now and what it will probably be when the bond matures and you collect the accumulated interest. You should also consider your other invest. ment income. Example: Bill Brown expects to be earning ll least as much when his bond matures as he is now. He collects a couple of hundred dollars in interest and dividend income I year. He should probably de- dare his Compound Bond Interest each year, because he'll pay less tn than if he declares all the interest in the year the bond motures. At But Barbara -Bl-d will not be working the year her Compound Interest Bonds mature. Perhnps she’Il be at home mining a family, or perhaps she'll have retired. She now has about “ADO in interest and dividend income, but she won't have this the year the bond matures (she'll have cashed in her savings to help buy a house. or to buy a retire- ment annuity). She should consider waiting to declare her Compound Bond interest until she actually collects it. If she declares the interest each year, she'll have to ply tux on it, but in the year of maturity, she won't have mulls-lied.“- ttries 'mttsetq h but. has not!“ ”(tannin mmhuwmmm pmdmmhm to (on! W and”! i-rite-tas")""- -aarsittte-ereeudtou,M. tmm 1.500 ire under‘l may tor totet,tmantttsMaB-steeudegree eatexttimeqtgt. Aattther 1. we do- "ioetor?t.deetet?ttm-"hr _ttommeiiroraaritr' any other income and so will pay little or no tax on her bond interest, depend- ing on the about". If you’re in a low tax bracket now and expect to be in the same or I higher bracket when your bonds pasture. you should prob- nbly declare..the income " you go along, a Sun Smith and Bill Brown did -- the accrual method. But if you're in a high tax bracket now and expect to be in a low bracket when the bonds mature, then you might be better off to wait until the bonds mature before you declare the interest income. as John Jones and Barbara Black did. . (The author, Mike Crenby. has won a number of business writing awards and has been acclaimed for his ability to make often- complicated financial sub- jects easily understood by laymen. -- Associated with the Vancouver Sun since 1961, he writes a nationally- syndicated column on personal fimtni, has lec- tured, appeared on national radio and television pro- grams and has written a book, "Mike Grenby’s Guide to Fighting Infution in Canada". He's a grad- uate of the University of British Columbia and Columbia University's graduate school of journalism.) L summary. the rule is .0.