Tax Tip Thursday

Tracking Investments

I want to talk about bookkeeping today and tracking of investments, rental properties and cottages.

One needs to ensure they stay on top of them and the financial information that will be relevant at some point in the future.

The key is recognizing that the information WILL FOR SURE be important and to make sure you prepare yourself for a successful outcome. Not maintaining the information that I am requesting will mean that you will have a more costly outcome in the future. This may not affect you, but could affect your kids.

DON’T LEAVE YOUR KIDS A FINANCIAL MESS!

For investments, the tax implications can more current or immediate, where rental properties and cottages can be a much longer term outcome.

The important thing is to keep track of the financial information that will give you the best possible outcome.

Investments

Maintain a summary of your accounts, investments and potential tax implications. Something as simple as documenting them on a piece of paper or an excel spreadsheet. You should have the following information and review/update it annually.

  • Where/How they are held
  • Types of investments
  • Book value of investments
  • Approximate value of the investments – Market value
  • Depending on investment – date of purchase
  • Maturity dates if applicable
  • Any identified tax implications

Rental Properties

I advise people to set up 1 page per property. On that page you should have:

  • Address
  • Ownership on title
  • Date of purchase
  • Purchase price
  • Fees, land transfer tax, legal, etc… associated with the purchase
  • Amount of mortgage
  • Interest rate
  • Payment frequency
  • Date of maturity
  • Capital improvements made to property each year
  • Tenant contact information
  • Monthly/annual lease
  • Annual property taxes
  • Estimated market value
  • Estimate tax implications

Cottages

This is quite similar to the Rental properties. I advise people to set up 1 page per property. On that page you should have:

  • Address
  • Ownership on title
  • Date of purchase
  • Purchase price
  • Fees, land transfer tax, legal, etc… associated with the purchase
  • Amount of mortgage
  • Interest rate
  • Payment frequency
  • Date of maturity
  • Capital improvements made to property each year
  • Annual property taxes
  • Estimated market value
  • Estimate tax implications

How to make this easy

The easiest thing to do is keep up with this as you go. A lot of this information will be challenging to find all at once and in a hurry, so if you capture it as you get it, things will be much easier! If you’re not sure where to look, book an appointment with us and we can help.

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.