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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - February 26, 1972, Lethbridge, Alberta Joturfny, February THE ItTHBRIDGE HNALD J7 Family ImsinKss income splil.ling case A victory for the taxpayer Western oils lead advance PETER LEICIINITZ Canadian Press Slaff Writer A spectacular advance by western oil issues, based on two major oil and gas discoveries, highlighted trading activily nn major Canadian stock markets tnis week. Tlie gradual upward trend es- tabb'shed early in the week reached a peak Friday when the Toronto stock market recorded its best session in more tlian two years. One market observer said: "It was the most hectic session I've seen in five years." The advance left most Cana- dian markets littered with is- sues trading at higlis for tlie year. At New York, however, mutt issues only recorded fractional advances in moderate trading. On the Montreal and Cana- dian the composite index rose points during the week, closing Friday at 20-5.13. Combined volume on the two By Gone Fatvcelte DREAM 1NTEP.PRETAT1CN- LONG A FAVORED TCOL OF THE fSltHOANALVST-19 NOW BEINS USED A LITTLE DIFFERENTW A REPORT FROM THE U. OF CINCINNATI MEDICAL SCHOOL WHO HAVE "BAP DREAMS" CAN LOOK FORWARD TO >BT LABOR... exchanges was 5.93 million shares, compared with 5.41) mil- lion last week. Trading was active on the To- ronlo market with a lota) of 13.12 million shares changing bands, up from 13.50 million a week earlier. Friday, volume was 6.00 million shares, the highest since June 3. 1909. Gulf and Mobil Oil announced Tuesday a major gas discovery in the Mackenzie Delta area of British Columbia. Later in the week, Panardic Oils Ltd., a consortium of exploration com- panies and the federal govern- ment, said it had made its first oil discovery in Hie Canadian Arctic on Ellesmcre Island. The Toronto market's western oil index recorded its largest one-week advance of the year climbing 16.01 points and clos- ing Friday at 22P..29. LVDUSTIUALS STILL UP Induslrial issues continued their upwnrd trend, supported by an increasing number of fa- vorable earnings reports by sev- eral major companies. The Toronto market's In- dustrial index" closed Friday at 203.20, an all-lime high, up 3.-16 during the week. Al New York, the Dow Jones industrial average of 30 key By I. II. ASl'Kn Tlic newly constituted Tax Review Board has hamled clown a decision of consnlcr- able interest U> those families who plan their (ax affairs so tis to .split business or invest- ment income of the various family members. The board's rleci.sion was given orally, and may well appealed by the department of national revenue, so taxpayers would do well to await fui-thcr developments in the law before relying on the principles enun- ciated by hoard member A. J. Frost. What (he case decided, basi- cally, was that on the facts pre- sented, there is nothing in the income fax act which specif- ically prevents a family from splitting its income amongst the various members IhrouRh a family partnership. That is itself an over-simplification and some understanding of the background is essential to see it in its proper perspective. The business was then sold to the new partnerslup which consisted of Ihe new company and seven trusts for the fam- ily members. The lax effect of this wa.s l.bat inslcad of the business income being taxed at Up until nothing to IN EDMONTON Stay At the RIVIERA THE HOTEL WITH MORE TO OFFER AND WE NOW HAVE COLORED TV For Your Convenience In Making Reservations CALt AND ASK FOR LONG DISTANCE ZEnilh 0-7255 at no cost to you IVIERA MOTOR HOTEL 5359 Calgary Trail Edmonton, Alberla Phone: (103) 434.3431 Telfi: 037-2510 from incorporating each mem- ber, say, Uie father, mollier and tliree cluldren, into live separate companies. The five companies n-ould then form a partnership to invest funds or carry on the family business. Kac'i corporation would be tax- ed at. 21 per cent on ils income up to and 50 per cent on anything above that. The result was that up to S175.000 (five companies at J35.000) could be earned by the Friday at 922.79, Volume was 69.97 million blue-chip issues gained 5.117 group and IM taxed at 21 per points during Die week, closing cent. If they had lumped their earnings into family company, all hut the first would have been taxed at 50 per cent. Din-ing lire late 1950's and early 1980's, this corporate in- come splitting had become so extensive that the government adjusted the tax law. A new law was enacted which gave the revenue department the right, in its discretion, to ig- nore the separate corporations and lump the income of all companies together and tax it as though it had been earned by one company. Tlie tax ef- fect of this would be quite sub- stantial. FIHST ONE Many family businesses, tra- ditionally hard-pressed to find capital for growth and expan- sion, decided to restructure themselves in order to steer clear of the new taxing regula- tion for corporations. This is the essence of the the first of its kind to come before tlie review board. Tlie owners of the family business airanged to have a separate trust established for all seven members of the fam- i ily. As well, they established a new corporation which, in turn, was owned by the original sev- en corporations which had been used to carry on Uie family business. shares, down from 93.02 million a week earlier. However. U.S. markets were closed Monday Feb. 21. Base metal issues were mod- erately higher on the strength of a copper price increase by one major Canadian producer. Ana- lysts said they expected other producers to make similar price adjustments in tlie near future and that this has caused some buying in the ba.se metal sector of the market. At Toronto, the base metal rose 3.65 poinLs, closing Friday at 90.92, its best level since Aug. G, 1971. A marked reduction in trading activity and prices for gold on international bullion markets continued (o exert an adverse effect on Canadian gold-produc- ers this week. However, (lie general upward trend of. the market erased losses suffered early in the week and by Friday the Toronto stock market's gold index was ahead 2.53 points to 177.31. Record snowfall NORDEN, Calif. (Rcuter) iVorden, a town high in tlie Sierra Nevada mountains, is used to a heavy annual snowfall avenging 92 inches. But in (lie last four days alone, the na- tional weather sei-vice said, i Norden has received 51 inches of snow, bringing the year's total snowfall to 102 inches. H. H. Smith Ltd. Customs Broker 3288111 COOTTS Phont Bond prices Supplied by Doheily Dolierty McCuaig I.iraiied GOVERNMENT OF CANADA BONDS Sept. 1, '72 99.85 100.10 Oct. '75 99.00 99.50 S '.'e Jill. I, 78 107.75 108.75 ;41iro Sept. 1, 'SI W.OO 84.50 I Prrp. 3 ri Sep. 15 41.00 43.00 i GV.o Apr. 1, '75 102.75 Jul. 1, '75105.00106.00 j 5'..'i7o Sep. 'M 87.00 (18.CO PROVINCIAL GOVERNMENT OF CANADA GUARANTEED BONDS 0V NOTICE CITY OF LETHBRIDGE ENGINEERING DEPARTMENT 1972 RENTAL OF CONSTRUCTION EQUIPMENT 1972 Equipment Rental priorities by the Cily of Lelhbridge will be determined by Cily ticems rather than by the "Notice of Registration" used in prior years. Truckers, Equipment Renlnl and Excavating Firms, and oilier related busino.ssns, may list thoir equipment available for rental at Ihe Office of the Engineering Direclor upon obtaining a Cily license. Alberta Ontario 7 Onl Hyd P Er s J! S (i Quebec 7: il Jlcn Hyd Sask s' AGT II SI an Tel a 105.50 107.50 'IIB 63.50 85.50 'M 111.00 109.00 111.00 '7-1 3113.00 'S3 S7.C.1 89.00 '74 101.00 103.00 '91 100.00 102.00 'IK) 107.00 109.00 '90 K3.00 '74 10.1.00 105.00 j '7-1 103 00 103.00 i INDUSTRIAL; Alia G T 9UT, I A lean 9-Vi I B. C. For B.C. Tel 9Vi i Bell Tel 9V; Rell Tel CPR CP Sec Cdn Util CWNC; Gulf oil Inter P P OVr. Mnssey Xoranda 9'.i'.'> Int Nickel N and C G SI of Cdn 'IV Cdn P Tr Cdn P '90 10G.CO 100.00 '.11 107.00 199.00 I '92 105.00 '90 107.00 109.00 107.00 109.00 'M 109.00 lll.ooi '89 105.00 '90 JO-I.OO lOtf.flfl '91 lOfi.OO lOfl.OO '90 iiw.oo lon.oo 00 107.00 109.00 I iofi.no lon.oo '.00 107.00 lOfl.Od '90 107.00 109.00 '91 107.00 109.00 'M lor.oo inn.oo '911 lOil.OO 110.00 '90 110.00 112.00 1 CONVERTIBLES Alia G T '90 JJO.OO I.W.OO ('mis Gas Scnr Rain 7'v; Tr Cdn I' s 'r WC Tr C Wi; Tr Dyn.isly 7 Acklands '119 99.00 100.00 'Ml ill.00 ilH.dO 'Jlil IDfl.lX) 110.00 'IVI 10.1.00 107.00 'in nti.ixi i3ii.no 'jr_> IH.OO jo.oo O.VOO 97.00 Wiuchell eslalc for NEW YORK (AP) Walter VVinchell, the columnist who died last Sunday at the age of 74, left the bulk of his estimated estate in (rust for his daughter, his will filed for pro- bate s h owed Friday. The Damon Runyon Cancer Fund, which Wine-hell founded and helped enrich by millions of dol- lars, received Rose Big- man, the secretary whom Win- e-hell called lus "girl was given I9G3, there prevent n family j Dividends SO per cent, us It would have liecn if it were earned by one company, it was taxed at tlie personal rates of the wives and children and (.heir trusts. This could in many cases produce a lower net tax bite, although in higher income (he rales for individuals does exceed the corporate rate by a considerable amount. fn ibis particular ca.se, ihe family partnership slruclure produced a lesser tax result Ihnn would have been paid had Ihe family carried on business through a single corporation. The revenue department originally accepted this method of structuring family business- es, but after reviewing them agum in the late 1960s, decided to attack them on the chief ground that they constituted unauthorized tax avoidance. In this first case, they pro- ceeded under a section of the act TChidi says no deductions will be allowed if they "artifi- cially" reduce one's income. i They also claim the transac- chanics and legal formalities aren't completed for several months. The Ian department argue that all the income of the part- nership should be Ijixed as though it. was earned by the single corporation, rather than split amongst the family mem- bers at lower tax rales. Tlie board came to the con- clusion that because of many of the specific techniques employ- ed in this particular cnse, there was a ring of artificiality to the transaction. However, Mr. Frost ruled that tlie income Us act onJy attacks the.se transac- tions where the laipayer seeks artificially contrived tax deduc- tions, but not where Hie las- payer legitimately redislribiiles tiii income in favor of others. The board said that if Ihe ;overnment didn't like family income splitting, it had the power to outlaw it, hut that tho law gave the board no such au- thority. There are many similar cases awaiting trial. Until a fi- n- j nal legal position is adopted, By TJJE CANADIAN PRESS doc Atlantic Sugar Refineries Ltd., 10 cents April 3, record March 20. licit C n n a rl a, common M cents April 14. record March IS; 53.20 pfd. 80 cents May record March 30. Maple Leaf Mills Ltd., com- mon 20 cenls; per cent pfd. both April 3. record March 15. Headers Digesl Association Canada Ltd., 16 cents March 31, record March 10. Shell Oil Co.. m cents U.S. March 27, record March 8. lion was void because tlie fam- ily trusts were not completely j perhaps by' Ihe Supreme Court, cum en ted until several families in business together will continue to have difficulty in planning Uieir affairs. However, this first judgment cases a ray of hope in their di- rection. The government would do well to resolve the backlog of cases in a reasonable man- ner and publish clear guide- lines to govern the future. (Mr. Asper is a Winnipeg lawyer) months after the new partner- ship was officially created. COMMON 1'IUCTICE Mr. Frost, in making his rul- ing, quickly put aside Uie issue of wlicn the Jegal documents were finalized, because he rec- ognized that it is common prac- tice for people to decide on a course of action, begin to im- plement it, even though the me-- PAPER RAISES PRICE PARIS (Reuter) Le Monde, France's most influential doily newspaper, announced Friday il is raising its pi-ice lo six cents from five cents March I be- cause of increasing production costs and stagnating advertising MULTI-LINE INSURANCE CAREER OPPORTUNITY TWO AGENTS WILL BE ADDED TO OUR STAFF IN LETHBRIDGE AND TABER AREAS Favorable compeliliva position ef our company meo greater earningi for repreienlalivft Wa Will Furniih Financing Asiittanca Education ana1 Experience Need Not Barrier! Phone 328-1175 and Ask For Sales Manager 8 Jhanki, Jn >_________' wmonamA IN MEMORIAM BP.OWN In-loving memory of a dear brother, Paul nichard, aged foui1, who passed away February 28, 1971. We often wl and think of you and of Uic way you died. Many times we've longed for you, many times we've cried. You gave no one a last fare- well, nor even said good- bye. You were gone More we realized, and only God knows why. remembered by David and Edilh. 789 IN MEMORIAM BUOWN ,Jusl a prayer, ID memory of a son, broth- Paul Hieb- Jard, who passed I away February 1971, at age four years and four months. Dear God, please take a message t o Paul up above, 1'leasc tell him how much we miss him and give him all our love. remembered and sadly missed by his mother and dad, brothers and sisters. 798 FOR SALE BY OWNER At One of Lethbridge's Best tocotioni 605 28th Street South, Lethbridge Such features as: 1600 sq. ft. on ihe main floor, 3 bedrooms, dining room wilh buill In china cabinet, Tappan deluxe dishwasher, family room, builr in healed garagg with door open- er, two one covered, professionally londicapsd, underground sprinkler lyitem, wall to wnll carped in all rooms, two full bathrooms. FULL Kfifi PRICE O I ?WUU DOWN PAYMENT OPEN Contact BILL MORGAN Res. Ph. 328-3729 Bus. Ph. 328-6056 Crossword By Manfred Z. Lemmo MISCELLANY 1 COUP d' 5 Handle 15 Hack 19 delicacy 20 English novpli'i 21 Largs ipoon 22 Fit 23 Corny 77 Ellipsoid 23 Ohio city 29 Oleorrst'i derivaiiwi 30 Puerto fliran ciiy 31 Canadian 33 JOIE ds 34 Cosmtuie 35 Caravansary 37 Dwindled jfl Unlnjifi 40 Insn ii-.pr 44 GreR': 45 "Green hero 7 Type c 2 Surgfd ACROSS nail 77 Su.-rr SO "La For7s -----Desiino" Bl Slushy stuff 52 Scot 53 County in Ulster 54 Bndjs b5 Rhine uibuiary 56 Signers- 67 Kind of noji SB Kookie: Brii. 59 TafcB it eaiy; colloa, filGold: It. GTi Opera solo 66 City in Penn- nil 67 Intellect BS Care for 53 Spasmodic twitch 72 Dutch ward for town style BON. Carolina college SI European capital 82 French river E3 Chslice veil 84 Heloun individuali collog. 69 Child's B1 A turned name 92 Loren'i 93 GVPW'i mourn E4 95 Sheds 95 Positive 97C.S.A. hero 98 Resident of: