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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - November 6, 1970, Lethbridge, Alberta Tax Rela his income it's a one-way street. Husband and transactions in business are also penalized Ijy Hie rule Hint il a husband employs liis wife in lis business, her salary is addet to his, for tax purposes. Tims he's again taxed on her income. If he's even a partner in a business which employs her then a percentage ol her wages equal to his percentage the business is taxed as his in come. And if a husband goes iulo parlnersliip with his wife, even if she uses her own money, or borrows it from a stranger, (tax department c.in treat a income from the IHLMJIC.SS a being Ihe husband's and Ui on her share ot Ihe profit !even though i'e can'L (.'Ball touch her share. Tlie.se rules are froqirciill responsible for family bus nesses being incorporated. Th lax law doesn't prevent a hus hand anil wife from being LT shareholders in a company provided the wife receives lie shares from the treasury of th company and not from her bus byncl. U n d o i (hose circum stances the wife can receive deductible wane from the fam lily corporation. Still, it is difficult lo undci stand why the family busbies unil, which has been the hack jbone of Canadian economi 1 growth should be singled ou for (his discrimuiaiory t a reatrnent. The tax law is based on th presumption that people irh are related to each other can possibly deal at arm's lengt with cadi other. Thus, the business dealings are Lax-per allied. Those who have ha anything to do irilh family IJIL relationships wiU knoi i that this presumption is prc posterous Yet the law make it an absolute fact. The fallacy of this can h seen from an actual case, iman owns a building whic contains two stores of equa size. Both stores are leased fo five years at each pe year. The tenant in one store is stranger to the owner but th other is his brother-in-law. 1 buyer approaches the owne and offers him n pood pric for the building, but only if h can get (he tenants out. The owner negotiates w i t both tenants and they agree t cancel their leases if the owne will pay them each. H asnx-s and pays them-NOT DEDUCTIBLE Now the tax rules apply. Th he pays the stranger i a deductible expense for Mm But the lie pays liis broth er-in-law for precisely the sam tiling is not deductible, becaus they are related. You can't find any rations explanation for this. Thi theme runs throughout th whole piece. There ere tax penalties if sell anything to a related per son; there are even more pn lentially serious tax penaltie awaiting those people who in vest in several companies will different relatives. In I h a case, tbe income ol all the com panies can be lumped togethe ror tax piuposes, produeini liglier tax rates than wouli normally be encountered. Professional advisers to fam lies and family business have ong looked forward to tbe abolition of these penalties. Related taxpayers should not be penalized simply because thej are related. (Mr. Asper is a Winnipeg awyer..) rnces Winnipeg Groin WINNIPEG (CP) Rapt seed prices declined two 1 four cents at mid-session on tin Winnipeg Grain Exchange to day on fairly heavy commis sion house liquidation attn bitted to the increased rapesew primary delivery quota, an nounced today. was iirirr on commis sion house buying. Hedge of furs were well absorbed am gains trerfi marginal. Oats, barifiy and rye flue lualed from fractionally below to marginally above previoiL close levels. Oats and barlcj had moderately good domcsti shipper buying with some ex porter interest continuing ir barley. Tlmrsday's export loading, of Canadian wlreat includet bushels to Britain, 41, 000 to Belgium. Volume of trade Thursday was bushels of flax of rapeseed, of rye. Mid-session prices: Flax-. Nov. higher Dec. higher 2.47HA; May unchanged July unchanged 2.57MB. Rapeseed Vancouver; Nov. lower 289A; Jan. 35J lower March 2% lower 2.1i7ViB; May Via lower 2 Rapeseed Thunder Bay: Dec. lower April lower Gats- Dec. unchanged 87A; May lower July not open. Barley: Dec. unchanged 1.28; May lower 1.28KiB; July not open. Rye: Dec. 1% lower May 114 lower July not open. Prices Thursday for class .wo wheat lor export lo countries outside IGA, 1 nor 1.80; 2 1.78; 3 4 I Durum l.MWs; 2 3 4 IGA prices: 1 Nor 1.80; 2 1.78; 3 4 1 Durum 2 3 1 High Low Close Flax Nov 253% 246% 233V2 Dec 247% 242 243% May 257% 253% 25G% Jly 257'A Rapeseed Vancouver Nov 293% 292% Jan 278 282% Mar 271% 266% May 564 259% 263% Rapeseed Thunder Bay Dec. 233% Apr Oals Dec 87 May 86% 85% Sri% Jlv B6 Barley Dec 128 128 May 128% 127ia 128% Jly 128% Rye Dec 108% 10714 108% May 114% 116 Jly C Answers By PIIJL ADLEIl SEATTLE (CP) The gian Boeing Co., developing a super sonic transport for the United Stales at a cost ol billion while laying off thousands o workers, is taking a no-nonsense approach to SST Critics Boeing chief engineer John M Swihart says critics don't know what they are talking about. He told an Associated Press meet ing that the press has beet taken in by those who disagree H'ilh the supersonic program Mi'.ch. cpposifion to the costly program was based or misinformation and biased sources, he said. However, in a moment of generosity, Swihart said there are a few areas where "we need more information to firm up our conclusions." Rows of cmply office desks, idle machinery and vacanl parking spaces show that Boeing is having problems Per-share earnings for nine months ended Kept. 1 were 80 cents compared with 85 cents for the same period in 1969. The company, ridjjjp high on commercial aircraft produc ion and defence contracts, had a work force of about in January, 1968. This has shrunk to and more cutbacks called involuntary termination planned before this year ends. Tlie Seattle-area economy tied closely to the health o Boeing, is depressed. KICK IT AROUND Because the government is contributing about billion to the development of two SST pro-.otype aircraft, the program l By I. II. ASPEIl Everyone knows that having a lot of relatives has its problems. But doing business with them may give you more, particularly in the lax field. The law imposes tax penal-tics on transactions between related people. The law entraps commercial dealings between husband and wife, parent and child, as well as business deal-togs amongst relatives. Each year many innocent taxpayers unknowingly expose ihemsclves to tax liability because Uiey aren't aware of the rules. The cardinal lax rule between husband and wife is (bat if a man transfers any property or asset to his wife, then he must always pay the tax on her income ironi that property. For example, if a husband sells same share of his business to his wife, even though she pays the full price for the shares, he will have to pay the lax on all dividends she receives from those shares. This is manifestly unfair in itself, expecially if the wife has paid full value for the shares out of her own money. The inequity is carried further by the Tact that the husband can't legally get his hands on the income his wife receives, still ho has to pay the tax on her income at his own rates of tax. Even if they are separated and dealing completely at arm's length with each other, the rule prevails. If a wife receives money from her husband, and she suffers losses on her investments, he can't deduct the loss Market L In Early TORONTO (CP) The T ronto slock market was fra tionally lower in lighl mic morning trading today as it e tered a second consecutive d dining session. On index, industrials droppe .31 lo 1GS.62, base metals .52 02.44 and western oils 1.50 18264. Golds advanced .05 179.32. Volume by 11 a.m. was 404 00( shares, down from at th same time Thursday. Losses outnumbered gains 1! to 74 with 152 issues unchanged Weakest sectors were banks merchandising and real eslate Eleven of the exchange's 1 sub-indexes were lower. Among losing stocks, Pom Pete was down 2 to Crown Trust to Simpsons 1 Pacific Pete to CPR to and Canadia Westinghouse Vi to CONWEST OFF Comvest dropped Vt to Norlhgate 20 cents to ?8.50 Eanger Vi to and Spoone 13 cents to Among gainers, Trading common was up lo Su pcrlest ordinary lk to 544, Kai ser Resources lo Sher rilt to and Scurry-Bain bow IVs to Trading in North Rock Explo rations was suspended by the Toronto Stock Exchange pend ing claritication ol informatior available lo investors. Trading in IJia companyV shares was hailed at the open ing Thursday. The exchange said (he stock had increased in price from the 34-50 cent rp.nge in August (o a high of Thursday. A review ol trading showed most of the purchasers ol the slock resided in Wesl Germany the exchange said, and news re ports published there had mis construed the current status o the company. UTILITIES UP MONTREAL (CP) The Montreal stock market slumpec in all sectors except utlities today in quiet trading. On index, utilities gained .25 to 138.85 while industrials fell .36 to 167.04, banks .20 to 170.42, the composite index .22 to 162.52 and papers .19 to 83. OS. Combined volume on the Montreal and Canadian Stock Exchanges to n was shares traded, compared with at the same time Thursday. Petrofina Canada Ltd., which did not trade, announced net earnings ot or a share for the first nine months of 1S70 compared with or 92 cents the corresponding >eriod last year. Weston declined 5H4 to Scott's Restaurants Ltd. to Velcro Industries Vz to 525i4, Simpsons to and Belgium Standard Ltd. rose 'A o Bombardier Ltd. to Placer y, to Inter-'rovincial Pipe Lines lo and Consolidated Textiles to EVEN KEEL NEW YORK