= PENINSULA NEWS REVIEW { .. There are two main reasons that income | h splitting is advantageous for the taxpayer. : Under Canadian tax rules, each person is currently allowed to report $6,456 in income before having to pay income tax. Therefore, if the taxpayer can find a way to transfer. income »: i to children, each child could have $6,456 i in. H _ income without tax liability. The other } .- reason that it is better.to divide : income among family members, f _.. is that Canada has three income ... ’- tax brackets, with higher levels _of income being taxed at higher — rates: The more income which --ff-- can be transferred out of the. : higher t brackets, the less. tax the: family will pay. Of course, ‘Revenue Canada Taxation.” - has special rules which restrict the amount of income. splitting which can be. carried on. ~ These “attribution rules” apply : to property. loaned or ‘transferred to the taxpayer’s spouse or minor children... the transferred property back to the ori iginal Owner. -~The term “property” includes money; so.even if.a” ~ taxpayer gives a spouse or child money. to.invest,-the: «interest. or dividen : following « cases $8, 608 before’ paying any, tax; value: ck ie Hele his SS ee “In what year was tax o on n capital gains aad ‘introduced in Canada? . a)1972.b) 1985. “1968 my 1960 Prior to 1983, child care expenses could g enerally only be claimed by: vo =) 1982. a)a man. . ~b)a woman ~ ¢) married couples |... d) a single parent -¢) the higher Income spouse Registered Retirement Savings Plans were first Introduced in: a)1933. b) 1946 €).1957 dd) 1966 ¢) 1971 The attribution. rules “attribute”. the i income ‘earned from ds earned: would have to be: oe oan the attribution rules will not. apply i in nthe © oe taxable, this means tI that: a \ child could have gains Of : Spouses may also split Canada Pension Plan retirement. pots ‘benefits if the taxpayers are more than’ 60 years of age aC: and apply to: have the payments divided between them. Buss : Property sold to a. spouse ‘or child at fair market — a. Otto Jelinck, Minister of National Revenue fom “AFFAIRS « A loan made to.a spouse or child at a commercial rate of interest, if the interest is paid within 30 days after the. end of the year; a Transfers of property. that are used to generate business income; and 7) lnceane from the Teinvestment of previously attributed i income. ~The self-employed taxpayer has several opportunities for ~ dividing income among - family: members.-Spouses -- can be partners in a business as long’as each contributes a Significant amount of time, skill, or training. The taxpayer. may pay the however. If the taxpayer ‘has rental property, family” “members, may. be paid reasonable. amounts for: - bookkeeping, yard work, repairs, etc. ‘When it comes to deciding which’ spouse should make es . ‘investments, A twill abe better for the lower i income = * 2 to: in jest’ as much of his’ or her income as possible, we ae while the higher i income spouse: pays ‘the costs of. daily _. living;:such as mortgage or rent, gro eries, utilities and funds aS were nol contributed in: th Bee yea! or the | previous two years. This: could be helpful. if the ower: income spouse is planning on Teturning to. school » with ‘the children: This i is also a way to even out retirement income. ace “1988 to 1993, previously achieved fame as alee a) TV evangelist b) country and western singer: ©) Olympic figuré skater » d) bartender at Winston’s @) first Canadian, in space: are nae rene cee ne ee ee WAL vs q YAOI: ! D1dIATO Foe : ~yuouioayqad oe ay 40] asps 01 syonpyayp yu sacle OP AUN UY ADA SHYT spaonpadgty A4dNN SUD SSupang peartag yay paaaspFay 2661 E ‘ ; “suopani; 11 pun sayS}y Jo saya?) Mau ayy adtanaiay pyntoay sayna Stayysyxa ayy wy susarua avanyy °° HATO} pasp-auioaty uy 07 WayV]2 pasog-aapuaas y caddal pasupya ° StL HORANPAP ALL "MOS Uy dO Mu ftay pagynyidson asa SOLAS aSOIA 40 Sod apStyS adaar CYAL Hat dof papyrodd doa suONdadxa YEO YO Upto 1