I know, it’s taxes, we’ll keep it brief. The following only applies to taxable investment accounts, i.e. not a registered investment account like a TFSA, RESP or RRSP.
Capital Gains and Capital Losses
Say you own $2000 of Apple stock and it grows to $5000 over the course of three years, at which point you sell it. In Canada, the government will only tax you on half of your $3000 gain, meaning $1500 is added to your taxable income the year you sell the stock.
If the $2000 tanks down to $1000 after three years, and you sell it because you need the money, you can use your $1000 loss to lower taxable gains on other stocks you’re selling that year. If you happen to be selling another stock at a $2000 gain, you’d be taxed on $1000, which nets out to $0 when you apply your $1000 capital loss on the Apple stock.
Capital losses can also be applied going back three years and carried forward indefinitely if unused.
Sometimes a stock, like Apple, for example, will throw a little cash your way every three or six months called a dividend. It’s an age-old way of rewarding shareholders or fund holders for hanging on. That dividend, as far as the Canadian government is concerned, is taxed as follows:
Suppose you receive $20 from Apple dividends by the end of the year. Inflate that $20 by 38%, which comes to $27.60, and that’s what you report on your taxable income. But wait, the government offers shareholders a credit on most dividends that offsets that number somewhat. The credit works out to 15.0198% of $27.60, which equals $4.145, lowering your taxable dividend to $23.455.
If you own bonds or a bond fund, they’ll pay you interest, usually monthly, which is taxable as income the year it’s received. That means you add the interest to the rest of your income, say, from your job, when reporting it for your taxes.
That’s it. Hope it helps. Especially if you’re a new investor who may have invested in a taxable account without meaning to amidst all the market enthusiasm.
There are 31 past articles in this series you can peruse.
I also have a step-by-step instructional guide to index investing.
As always, feel free to drop any investing questions in the comments.
Disclaimer: This article is meant for general education purposes only. It does not constitute financial advice as I am unaware of your personal financial situation. Consult with a professional who abides by a fiduciary standard before making any investment decisions.
The incredible usefulness of knowing what to do with trauma when it lands in your lap is not usually part of the curriculum, in or out of school. It’s a skill often learned in the aftermath of an unfortunate event, one you aren’t familiar enough with to see a way out.
In my limited experience, I take therapy to be an admission that life is made up of the seemingly insurmountable, but you can be taught how to differentiate between the impossible and the unbelievably hard. Engaging in any kind of therapy, clinical or not, is taking a firm stance on the normality of uncertainty – of things occasionally falling outside of your control – without giving up on workable solutions toward who you want to be moving forward.
That enduring grip on who you want to become, despite the bullshit (self-inflicted or from the outside world), is what comes through the strongest for me from Breanna Maloney’s new play, Cooking for Grief.
The play centres on a group therapy session with four characters at various stages of coming to terms with who they are and how they heal. Though there are in-depth storylines covering alcoholism, physical abuse, and death, there is a sense that hardship isn’t as essential to their self-definition as it once was. These individuals are not rookies to the ordeal of picking themselves up when nobody else is around.
Anand Rajaram, as Jerome, for example, projects the even-keeled disposition of someone who had to fight years to forge it out of strings of bad decisions. The peace he exudes as the leader of the therapy session is a balm for the other people in the room. I’m calming down just thinking of him. I feel his patient insistence on nudging the rest of the group away from self-loathing and unaccountability and toward the aforementioned workable solutions is full of the love we all dream of.
Aris Tyros, as Rob, is pretty enrapturing as someone on the opposite extreme of Jerome’s, someone who reacts without thinking and tries to gather knowledge amidst the wreckage he leaves in his wake. It’s his brashness, like someone running toward the fire, that kept my attention. What makes him even more convincing, in my view, is how Rob is intelligent and eloquent about his misfortunes and addictions, such that he can make himself feel better by painting himself in a better light. He is too smart for his own good, and it is a reward to watch as Jerome, Tori and Monique reflect his bs back at him, and he deflects it back at them, until eventually someone busts a gasket and a breakthrough ensues. This happened over and over with the cast, making me forget that I was watching a cinematic staged reading as opposed to a full-fledged production.
Banafsheh Taherian, as Monique, has to me the standout moment of the play when she recalls her son’s car accident, which leads her to find relief in wine. The shame and infinite love in her voice as she relives the experience take us there, making it easy to imagine the scene in vivid detail, which amplifies her story’s impact by having us fill it in as our minds prefer. Monique devastated me with her utter heartbreak and shook me into an acute awareness of all the extra affection I could be showing the people in my life.
Maloney, as Tori, fills the role of group shit-talker with aplomb. Her self-assurance is hard-won, after considerable strife, and will knock you down to size if you’re inconsiderate, but it’s never dismissive; rather, it comes from the knowledge that overcoming trauma often requires directions you may not even know you need.
Bringing it all together, Director Sarah Marchand, Playwright Breanna Maloney and Dramaturg Merlin Simard have assembled for us an intimate, messily authentic look at the great joy and tragedy of having people who mean more to you than anything.
The show has been extended until July 3, 2021. Tickets are available here.