Victoria wants to build an education plan for her twins Brooklyn and Nicola. You recommend 4 independent
Question:
Victoria wants to build an education plan for her twins Brooklyn and Nicola. You recommend 4 independent scenario's she can consider:
Questions:
- Invest in RESPs in the children's names
- Invest in non-registered equity investments in the children's names
- Invest in TFSA's in Victoria' name
- Borrow $100,000 to invest Victoria's name
Victoria has a total of $5,000 per year committed to education funding. Using an 6% ROR (all interest income) for each scenario including re-investments;
a 14-year timeframe (n=14); 50% MTR for Victoria, a 15% MTR for the twins for any taxable income over $15,000 in a year; and a 5% carrying cost on the leverage option (interest-only leverage). Show how each scenario would work with absolute optimization of the strategy from a tax perspective, redeeming all funds over a 4-year undergraduate degree (n=4) using a 1% ROR.
Explain to Victoria the tax minimization strategy utilized for each scenario and Two advantages ?
Disadvantages of each scenario? Which option would you recommend?
Introduction To Business Law
ISBN: 9780324826999
3rd Edition
Authors: Jeff Rey F. Beatty, Susan S. Samuelson