Investment Income vs Capital Gains

Have you ever wondered what the difference is between investment income and capital gain? Well look no further, we’re here to clarify the difference in a simple way! Lets start off with capital gains. A capital gain occurs when a person realizes a profit from the investment of capital. For example, Person A acquires a parcel of land in year 1 which costs $100,000 (this is the investment of capital or also referred to as the capital expenditure). The intention of the purchase is to hold the land for 1 year and hope the property appreciates in value. Now, it’s year 3...

TFSA vs RRSP

First of all, I would like to start off by wishing everyone a Happy New Year. It’s a new year with new beginnings, which is actually one of the reasons why we have started this quarterly newsletter. This is the first newsletter of many to come. We will discuss relevant topics of taxation and accounting that apply to common everyday situations. But more importantly, we will keep it in simple, plain English as opposed to packing in complicated accounting nonsense. Since it is that time of the year for RRSP contributions, it only makes sense to begin our newsletters...