Anwar And Loher Case Study To Children
When it comes to leaving any inheritance to children it can become very difficult deciding on how to disperse of the assets equally, as there are many factors that can come into play by deciphering between equality and fairness when it is concerning multiple assets. For this specific case study, we know Anwar and Leah would like to be as fair to their children as possible. We know the following; in the result of the first death assets will be given to the surviving spouse, and after the second death they will be rolled out to their children, probate fees are not factored in to their assets, and all assets will remain the same value as currently noted for the purpose of this case study. Reviewing the assets currently the principal residence
has a lower gain than the vacation property. So, in this case to take advantage of the principal residence exemption, we will use the vacation property as the principle residence. Also both Anwar and Leah's TFSA's will not be taxed due to the fact that the contributions made are with after tax dollars. The following assets however will be subject to capital gain. Home current value is $2,000,000 original cost $800,000 which would leave a capital gain of $1,200,000. For the Non- Registered current value $800,000 original $400,000 which would leave a capital gain in the amount of $400,000. With a combined total capital gain of $1,600,000 which 50% would be a taxable capital gain, $800,000 would be the tax impact. Upon Leah and Anwar's deaths combining the RRSP's which equal to $1,700,000 will be taxed. The highest marginal tax rate is 54% will apply to the combined 2,500,000 which would equal $1,350,000 on death. By deducting the above tax implications of $1,350,000 by the current net value showed in the case study $8,085,000 would leave an after tax estate of $6,735,000. At this point you can then equally divide that amount with all 3 children equally which would result in $2,245,000 per child.
has a lower gain than the vacation property. So, in this case to take advantage of the principal residence exemption, we will use the vacation property as the principle residence. Also both Anwar and Leah's TFSA's will not be taxed due to the fact that the contributions made are with after tax dollars. The following assets however will be subject to capital gain. Home current value is $2,000,000 original cost $800,000 which would leave a capital gain of $1,200,000. For the Non- Registered current value $800,000 original $400,000 which would leave a capital gain in the amount of $400,000. With a combined total capital gain of $1,600,000 which 50% would be a taxable capital gain, $800,000 would be the tax impact. Upon Leah and Anwar's deaths combining the RRSP's which equal to $1,700,000 will be taxed. The highest marginal tax rate is 54% will apply to the combined 2,500,000 which would equal $1,350,000 on death. By deducting the above tax implications of $1,350,000 by the current net value showed in the case study $8,085,000 would leave an after tax estate of $6,735,000. At this point you can then equally divide that amount with all 3 children equally which would result in $2,245,000 per child.