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Lethbridge Herald Newspaper Archives

- Page 88

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Lethbridge Herald, The (Newspaper) - December 3, 1971, Lethbridge, Alberta The tax column Capital gains system needs amendment By ASPRn Regardless of whether Parli ament passes I he new Income Tax Act by year end or car ries the debate over into the new its passage is as The only unknown aspect is how many amendments the government will accept before And even that wont conclude Hie The next several years will see a constant flow of particularly to the new and untried portions of the This is the natural result of applying com plex and often rigid rules to something as sensitive as the patterns of business and invest ment that have been long prac tised1 by he As Canadas financial com munity begins to adapt to tlw new its members will un cover those aspects of tire law which inhibit or thwart flexibility and simplicity of do ing The finance de partment will be kepi busy con sidering requests for further amendments at least until the end of the just as it For the proposed law docs not yet have an adequate rollover In lax a rollover occurs when a taxpayer dis poses of a capital only to use the money to acquire a similar If the first asset is sold at a the basic rule is that tlie capital gains tax will apply even though the cash is needed to pay for the replacement An example The taxpayer is a His production increases beyond the capacity of his He sells the plant and uses the money to buy i larger If the original I j plant is sold for more than its I y the taxpayer will have to pay tax on his rather fleeting capital NO GAIN Tiie United Stales through a rather complex tech recognizes ihat in one asset has merely been exchanged for there can be no taxable gain until the replacement property is The Canadian system will ap surance proceeds to acquire 5 replacement property before the end of the next taxation the rollover is recognized and no capital gains tax will be levied until the replacement property is this exception only applies when a taxpayer dis poses of his property involun such as by fire destruc tion or through Taxpayers threatened with ex propriation should note that if they voluntarily sell their prop erty to the expropriating agen pass was after the 1948 enactment ply the rollover concept in only of UK present I limited Where the tax The capital gains lax system will the one most frequently as professional bodies of lawyers and accountants payers property is destroyed by for and the insurance settlement exceeds his normally a capital seek to improve and perfect I gains tax will be applied on the The system provides fertile I Under the rollover ground for I if the taxpayer uses all the in million on permits EDMONTON CP The value of building permits is sued by the city this year likely will exceed statis tics released by city hall re For the first 11 the total number of permits were valued at Value of permits issued during No vember totalled The previous 12month record for value of construction was set in 1969 when total permits were valued at c and plant in order to buy a larrrnr gain will be it is only I will be locked inlo his j when they have been legally original Neither expropriated that the tax defer situation is nor does it nn ral can lie courage individual economic Another example of the Ca1 Amendments to the nadian capital gains tax defer1 system Jo cover this situation1 ra arises where one invests in bonds or debentures which are convertible into shares of the Suppose one buys a debenture for convertible into common shares at At the time the deben ture holder the stock is trading at he has made a capital and would be through the rollover he is not tax ed until he actually sells the exchanged asset the com mon shares when his actual realized gain can be deter TA XDEFEItKEll There are several other situ ations where on the surface a taxable capital gain has been but the lax is deferred until the replacement asset is sold and the true if can be As taxpay ers will these defer ral situations are still too few The farmer who sells his farm at a for the pur pose of buying another farm often will not have the cash with which to pay like j the businessman who sells his i should be In Uie same there is no j tax deferral for the small busi nessman who sells the shares of his company to a public j corporation in exchange for shares in the larger It may be a condition of tiic dcai that the seller accept pay ment in the public shares with the proviso that I hey not bo sold for a certain That is normal business In that case the seller has i made a capital must pay I yet has no means of get ting the cash with which to What can lie even worse is that he must pay the tax on the basis of his original sale price even when he finally sells the exchanged shares in the public they have dropped in value and he has taken a These are but a few of the i examples of the defects in the j capital gains tax Fij nance Minister Benson should now be considering remedying the situation by further amend ment to the either before or shortly after its Asper is a Winnipeg lawyer SIMPSONSSEARS Five Great Gifts For The Lady On Your List Lady Kenmore Electric Mirror 1998 4 light settings You makeup for the light youll be daylight or Quality built mirror and cool fluorescent Mirror flips to magnifying side for eyelashes Adjustable Gasel Plastic 3 Way Hair Setter Dry or Conditioning Action 2498 This Lady Kenmore hair setter answers every hair care Set hair dry or with misting action or treat your hair to a conditioning mist with a special conditioner 21 rollers in 4 Beige plastic Dual Voltage Mini Dryer Can be usedworld Dries as it Compact Save Hair SetterConditioner Dry set hair in 310 Conditioner 20 rollers in 4 Lady Kenmore Shaver 10 For legs and Washable triple In White presentation STORE HOURS Open Daily 9 to Thursday and Friday 9 to 9 Centre Telephone 3289231 December 1971 THF LETKBRIDGS HERALD 19 304 STAFFORD DRIVE PHONE 3273125 OF R II A 1971 S MODELS 1971 RETAIL 1971 RETAIL 1971 RETAIL 1971 RETAIL 1971 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