Internet Payments

Secure & Reliable

Your data is encrypted and secure with us.
Godaddyseal image
VeraSafe Security Seal

Lethbridge Herald Newspaper Archives

- Page 55

Join us for 7 days to view your results

Enter your details to get started

or Login

What will you discover?

  • 108,666,265 Obituaries
  • 86,129,063 Archives
  • Birth & Marriages
  • Arrests & legal notices
  • And so much more
Issue Date:
Pages Available: 101

Search All United States newspapers

Research your ancestors and family tree, historical events, famous people and so much more!

Browse U.S. Newspaper Archives


Select the state you are looking for from the map or the list below

OCR Text

Lethbridge Herald (Newspaper) - December 3, 1971, Lethbridge, Alberta The tax column Capital gains system needs amendment By I. H. ASPER Regardless of whether Parliament passes the new Income Tax Act by year end or carries the debate over into the new year, its passage is assured. The only unknown aspect is how many amendments the government will accept' before enactment. And even that won't conclude tie debate. The next several years will see a constant flow of amendments, particularly to the new and untried portions of the system. This is the natural result of applying novel, complex and often rigid rules to something as sensitive as the patterns of business and investment that have been long practised by *he public. As Canada's financial community begins to adapt to the new rules, its members will uncover those aspects of the law which inhibit or thwart flexibility and simplicity of doing business. The finance department will be kept busy considering requests for further amendments at least until the end of the decade, just as it was after the 1948 enactment of the present law. The capital gains tax system will be the one most frequently debated, as professional bodies of lawyers and accountants seek to improve and perfect it. The system provides fertile ground for argument. For instance, the proposed law does not yet have an adequate "rollover" provision. In tax parlance, a "rollover" occurs when a taxpayer disposes of a capital asset, only to use the money to acquire a similar asset. If the first asset is sold at a profit, the basic rule is that the capital gains tax will apply even though the cash is needed to pay for the replacement asset. An example: The taxpayer is a businessman. His production increases beyond the capacity of his plant. He sells the plant and uses the money to buy larger premises. If the original plant is sold for more than its cost, the taxpayer will have to pay tax on his rather fleeting capital gain. NO GAIN The United States system, through a rather complex technique, recognizes that where, in effect, one asset has merely been exchanged for another, there can be no taxable gain until the replacement property is sold. The Canadian system will apply the rollover concept in only limited cases. Where the taxpayer's property is destroyed by fire, for example, and the insurance settlement exceeds his cost, normally a capital gains tax will be applied on the profit. Under the rollover rules, if the taxpayer uses all the in- surance proceeds to acquire a replacement property before the end of the next taxation year, the rollover is recognized and no capital gains tax will be levied until the replacement property is sold. However, this exception only applies when a taxpayer disposes of his property involuntarily, such as by fire destruction or through expropriation. Taxpayers threatened with expropriation should note that if they voluntarily sell their property to the expropriating agen- City to pass $200 million on permits EDMONTON (CP) - The value of building permits issued by the city this year likely will exceed $200 million, statistics released by city hall revealed. For the first 11 months, the total number of permits were valued at $193.7 million. Value of permits issued during November totalled $17.4 million. The previous 12-month record for value of construction was set in 1969 when total permits were valued at $169.2 million. cy, and realize a profit, the gain will be taxed. It is only when they have been legally expropriated that the tax deferral can be claimed. Another example of the Canadian capital gains tax deferral arises where one invests in bonds or debentures which are convertible into shares of the company. Suppose one buys a debenture for $100, convertible into common shares at $1:00 each. At the time the debenture holder converts, the stock is trading at $2.00. Theoretically, he has made a $100 capital gain, and would be taxed. However, through the rollover provision, he is not taxed until he actually sells the "exchanged" asset (the common shares) when his actual realized gain can be determined. TA XDEFERUED There are several other situations where on the surface a taxable capital gain has been made, but the tax is deferred until the replacement asset is sold and the true gain, if any, can be ascertained. As taxpayers will discover, these deferral situations are still too few and inflexible. The farmer who sells his farm at a profit, for the purpose of buying another farm often will not have the cash with which to pay tax. He, like the businessman who sells his plant in order to buy a larger facility, will be locked into hi.� original investment. Neither situation is fair, nor does it encourage individual economic expansion. Amendments to the system to cover this situation should be considered. In the same area, there is no tax deferral for the small businessman who sells the shares of his company to a public corporation in exchange for shares in the larger company. It may be a condition of the deal that the seller accept payment in the public shares with the proviso that they not be sold for a certain period. That is normal business practice. In that case the seller has made a capital gain, must pay tax, yet has no means of getting the cash with which to pay. What can be even worse is that he must pay the tax on the basis of his original sale price even if, when he finally sells the exchanged shares in the public company, they have dropped in value and he has taken a loss. These are but a few of the examples of the defects in the capital gains tax system. Finance Minister Benson should now be considering remedying the situation by further amendment to the law, either before or shortly after its passage. (Mr. Asper is a Winnipeg lawyer) SIMPSONS-S EARS Five Great Gifts For The Lady On Your list Lady Kenmore Electric Mirror 19.98 4 light settings You make-up for the light you'll be in. Office, home, daylight or evening. Quality built mirror and cool fluorescent bulbs. Mirror flips to magnifying side for lenses, eyelashes etc. Adjustable easel back. Plastic frame. 3 Way Hair Setter Dry or Conditioning Action 24-98 This tody Kenmore hair setter answers every hair care need. Set hair dry or with misting action or treat your hair to a conditioning mist with a special conditioner (included). 21 rollers in 4 sizes. Beige plastic housing. Dual Voltage Mini Dryer 14.98 Reg. $19.98. Can be used-world wide. Dries as it styles. Compact 5x3%xl%". Save 5.00! Hair Setter-Conditioner 12.99 Reg. $19.98. Dry set hair in 3-10 minutes. Conditioner included. 20 rollers in 4 sizes. Lady Kenmore Shaver .99 Reg. $14.98. For legs and underarms. Washable stainless triple head. In White presentation ease. STORE HOURS: Open Dally 9 a.m. to 5.-30 p.m. Thursday and Friday 9 a.m. to 9 p.m. Centre Village. Telephone 328-9237 304 STAFFORD DRIVE MODELS" 1110 PICKUP SERIAL NO. H088954 V-8, 4-Spoed. Colour Yellow. 1971 RETAIL $3946.25 1010 PICKUP SERIAL NO.- H133213 V-8. 3-Speed. Heavy Duty. Colour Red. 1971 RETAIL $3807.40 SERIAL NO. 190369 V-8, Auto. Trans. Radio. Colour Red. 1971 RETAIL $4395.00 1010 PICKUP SERIAL NO. HM8237 V-8, 4-SDeed. Colour Grein. 1971 RETAIL S3838.15 1010 PICKUP SERIAL NO. H1857P3 V-8. Auto. Trans. Colour Yellow. 1971 RETAIL $4387.25 1110 PICKUP SERIAL NO. HI34452 V-8, <1.Speed. Colour Gold. 1971 RETAIL $4025,00 I 1110 PICKUP SERIAL NO. H187641 6 Cyl. 3-Speed. Colour Red 1971 RETAIL $3622.35 SERIAL, NO. H J 87945 V-8, 4-Speed. Radio. Colour Red. 1971 RETAIL $4115.25 1110 PICKUP SERIAL NO. HI 87648 6 Cyl. 3Spe�-d. Colour Rod ALL UNITS WITH m ANTIFREEZE * BLOCK HEATER � FULL TANK OF GAS  3 GRIP TIRES 1971 RETAIL $3708.65 ;