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PAGE 8 â€" WATERLOO CHRONICLE, WEDNESDAY, MAY 11. Waterloo Regional Police report the folâ€" lowing break and enters for the week May 2â€"8. The Indexed Security Investment Plan (ISIP), which is due to go into effect on October 1, was introduced in the Federal budget of April 19. Its objective is to protect the investor from tax on the inflationary portion of gains on common stocks. In general terms, the cost of stocks held in an ISIP will be adjusted monthly for inflation based on the Consumer Price Index. At each yearâ€"end the market value of all investments in the plan will be compared to their indexed cost and 25% of the difference will be considered a capital gain or loss, one half of which will be recognized for tax purposes. Although indexing offers a significant advanâ€" tage, it‘s important to note that, unlike investments outside an ISIP, gains within an ISIP are taxed as accrued. However, capital losses from an ISIP will be deductible against other income without limit. Dividends and capital gains earned in an ISIP will not qualify for the $1,000 Canadian investment income deduction, but dividends will qualify for the normal dividend tax credit. Interest on funds borrowed to acquire ISIP securities will not be deductible. ISIP‘s are expected to have considerable appeal, particularly to those investors who trade frequently and have been accustomed to paying capital gains taxes annually. An ISIP involves a contract between an investor and an administrator. The adminisâ€" trator may be an investment dealer, stock broker, bank, trust company, credit union, Break and enters King St.S., entry via front door, razor and rings taken. Albert St. entry via front door, cash taken. Albert St., BOB COPLAND Your money entry via front door, herbal medicine taken. Police Week is May 15â€"21 and tours at headâ€" mutual fund or life insurance company. He will calculate the indexed cost, determine capital gains and losses, and provide informaâ€" tion for tax returns. Qualifying investments include most comâ€" mon shares of Canadian corporations listed on Canadian exchanges, units or shares of mutual funds, and an interest in a segregated fund of an insurance company. To illustrate the advantages of an ISIP, let‘s assume you invest $20,000 on Jan. 1, 1984 and no additional purchases or sales are made until Dec. 31, 1985 when you dispose of the portfolio. Inflation is assumed at 8% anâ€" nually. Cost base 1/1/84 Inflation adjustment Cost base 31/12/84 Market value 31/12/84 Accrued gain Gain for tax purposes Taxable gain (50%) Cost base 1/1/85 Inflation adjustment Cost base before disposition Proceeds 31/12/85 Gain for tax purposes Taxable gain (50%) Taxable gain 1/1/84 to 31/12/85 (1) 21,600 + 600 (2) 8% of 22.200 Bob Copland is a chartered accountant and personal financial planning consultant with Executive Compensation Consultants, Kitchâ€" ener. quarters at 134 Frederâ€" ick St. Kitchener will be Monday, May 16 through Thursday May 19 at 7: 30 p.m. 22,200 (1) 1,776 (2) 23,976 (27,000) 3,024 1,512 1,812 21,600 24,000 ISIP Nonâ€"LSIP (27,000) 24.000 Nil Nil Nil Nil _| _ The Professionals with the best â€" Warranty ' "| sseâ€"1040 d __~~~~~_ 355 Woeber St. N. Waterion _ Piea trainer for 884â€"7 100 W We will be closing Sat. May 14 For 2 Weeks Holidays l