Jason talks to David Barnett; a private transaction advisor. Today he is going to specifically talk about acquisitions, but not from the seller's point of view, but from the buyer's point of view.

Episode Highlights:

• 2.30: David says that he works with business owners who realize it might be faster and easier to grow through acquisition. Another pool of buyers are people who work someplace and don't like it and typically these people are sort of in the Middle age group where they have got mortgages and families and maybe children and they realize that if they want to pursue their entrepreneurial dream the risks of a startup may just be too great, but if they buy a business, they can become an entrepreneur without the risk of starting up. 
• 06.04: In the world of acquiring businesses, we often hear about EBITDA earnings before interest, taxes, depreciation, and amortization. We hear about EBITDA multiples, and in the mid-market space people toss around ideas of what businesses are worth various multiples 4,5,6 times or what have you. In the world of main street businesses, we use a different level of cash flow is called SDE - Sellers Discretionary Earnings and it is the total amount of cash flow available to an owner manager who works full time in the business.
• 14.36: If you double the size of your business by buying an equally sized company in another city and you double your volume of purchasing, you might not increase sales, you might not increase margins, but you might be able to increase your leverage with suppliers. 
• 18.46: When there is momentum in the transaction, when the buyer is eager and they want to make a deal, it benefits the seller to be ready to feed that desire with all the information they're looking for so that you can move quickly.
• 25.02: The reason someone is buying the business, the reason someone is going to be willing to pay some amount of money towards the goodwill that's been built into the business, is because they want to avoid the risk of a startup, says David. 
• 31.02: When you go to do the due diligence on that business, what you do is you, you check the bank statements to make sure the deposits are all correct and then you go through the box of invoices from all the suppliers, and you add them all up and you compare it to your income statement. If it looks kind of closely then you can be reasonably certain that the financial statements are likely close, but they are never exactly correct.

3 Key Points:

• David explains the details between EBITDA (Earnings Before Interest, Taxes, Depreciation, And Amortization) and SDE (Sellers Discretionary Earnings).
• David talks about the factors that prompt a seller to sell their business. 
• David shares how a buyer has to be ready to be able to deal with the unknowns and a lot of the times those unknowns are managed through the structure of the deal.

Tweetable Quotes:

• "Economics of buying a job is different than the economics of - hey I have got an enterprise already in place I am buying your client list right at you know will be preferred to as a strategic buyer." - Jason
• "I have also had clients who have mailed out letters in more than two years later, people have picked up the phone and reached back out to them." - David
• "A properly prepared buyer knows that there are always going to be these unknowns within the diligence." – David

Resources Mentioned:

• Facebook – Jason Pereira's Facebook
• LinkedIn – Jason Pereira's LinkedIn

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Jason talks to Aaron Hector, a private wealth advisor for CWB wealth. He is here to talk about old age security.

Episode Highlights:

• 1.09: Aaron is a financial planner. He works with CWB wealth, and the majority of his time is spent serving private clients and helping them out with their retirement planning and taxes.
• 1.55: Aaron has been one of the few who spent time writing about old age security topic that is an overlooked benefit compared to the Canada Pension Plan.
• 2.12: Old age security pension is a government pension. You need to be at least 65 years old to begin to receive it and it's for those who have residency within Canada, either current residency or former residency, you need to have lived in Canada for at least ten years after you are 18 years old, says Aaron. 
• 5.04: You get an extra .6 of a percent by choosing to postpone your starting point. If you start at age 66 instead of 65, you get an extra 7.2%, says Aaron. 
• 7.37: For every dollar above your net income exceeds, government will take away 15 cents of your old age security. Technically it is a recovery tax and people refer to this as a clawback, says Aaron. 
• 10.27: Aaron explains what are some of the ways that a family or couple or an individual can minimize their exposure to all these security paybacks?
• 12.13: For people who have their own corporations, especially for small businesses who don't have revenue over 500K, they are going to be paying dividends to themselves as a non-eligible dividend, says Aaron. 
• 17.06: If you have got a lot of health issues prior to making the decisions, then it's kind of hard to make decision for OAS, says Jason. 
• 18.13: For every year that you live, your life expectancy increases because you are part of the survivor pool.
• 19.42: Aaron talks about some of his better or favorite tricks or unique planning opportunities that are uncovered when it comes to deferring past 70.
• 20.26: The whole amount to the lump sum plus the ongoing monthly payments that you begin to receive after OAS is taxed in the year you get the money, says Aaron.
• 22.36: If you are at 71 and you forgot your OAS all the way through 70 and now you are going to apply retroactively, your one-year reach back is going to be at the age 70, says Aaron. 
• 28.23: The government did increase the amount payable to people of age 75 and older by roughly $80 roughly per month from October 2022 and this was the first meaningful change to OAS payments amount in very long time.

3 Key Points:

• Once your net income exceeds a certain threshold government begins to take away your old age security benefit and that threshold for the year 2022 has been set at $81,761 per person, says Aaron.
• Clawback is something that grinds people because there is a disproportional amount of time relative to the amount of dollars that can be saved spent on planning around all day security.
• If you think you are going to live to 75, don't postpone OAS, take it at 65 when it's on offer. If you think you're going to live to 90 you are probably wise to postpone it to 70.

Tweetable Quotes:

• "You need to have at least 10 years in Canada to qualify, but 40 to get the regular payment." – Aaron
• "Effective rates of tax are more important than marginal rates." - Aaron
• "You also have a one-off strategy around how to structure your estate in some cases, speak about that." - Jason

Resources Mentioned:

• Facebook – Jason Pereira's Facebook
• LinkedIn – Jason Pereira's LinkedIn
• https://www.linkedin.com/in/aaronhector/?originalSubdomain=ca
• https://www.cwbwealth.com/en

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Jason talks to Doug Runchey, owner & operator of DR Pensions Consulting; he's a foremost authority when it comes to understanding CPP.

Episode Highlights:

• 2.06: Doug started his consulting career 10 years ago on Canada pension and all the age security, but primarily Canada pension.
• 03.38: You pay for Canada Pension Plan if you have earnings from employment or self-employment. Those are the only two incomes that you can make in CPP contributions.
• 07.34: Talking about the CPP rates, Dough says that the benefits were going to go up from the 25% earnings replacement formula to a 33.33% earnings replacement formula. And that's what has resulted in the most recent increase basically being staged over five years. From 2019 through 2023 an increase of 1% for each of employer and employer, up from 4.95% to 5.95%.
• 13.10: If a person is working from the age of 18 to 22-23 in school, barely earning any money, and that is counting against his/her average, that's not great, says Jason.
• 17.07: If you are going to stop working and you would have drop out. You can end up with a better calculation of your average income by following few simple methods.
• 18.29: The first step in the process of the calculation is to bring all of your lifetime earnings up to a current year value. In the way that occurs is whatever year your benefits start, you take the average YMPE for the five years ending with the year that your benefits start, says Doug.
• 20.25: A pension is 50% higher if you wait five years. That is, government backed and guaranteed for life.
• 22.52: If you have worked five more years until 70, you can take those five years of maximum earnings, replace five years of zero or lower earnings and increase your average lifetime earnings significantly, says Doug.
• 31.27: The CPP retirement pension, as we say started at 65 or as early as 60 prior to that. If you become disabled while you are working, there is a disability benefit under CPP. 
• 35.00: If you have got your own corporation and you have the choice to pay yourself a salary or pay yourself dividends, then if you pay yourself. Salary. You are paying the CPP contributions both as the employer and as the employee, so you are paying both halves of it out of the company somehow. But if you pay yourself dividends, you don't pay CPP contributions, then you don't have a pension at the end of it, says Doug.

3 Key Points:

1. Dough talks about the contribution rates in the Canadian Pension Plan, what are the contribution rates today and where are they scheduled to go?
2. Doug explains if you want to take your CPP earlier than age 65, there are a couple of things happening. First of all, your calculated CPP, meaning your 25% of your lifetime earnings are calculated at the time you take your benefits.
3. If you don't take your CPP and you keep working beyond age 65, you can use each year of earnings to replace one of your earlier years of lower earnings, explains Doug.

Tweetable Quotes:

• "The contributions are the only incoming money to the fund except for the reinvestment of those contributions and that's all managed by us." - Doug
• "Even if you are paying a fairly high tax rate on your CPP because you are still working. And you are the sources of income. Doesn't mean you still don't take it early." - Jason

Resources Mentioned:

LinkedIn – Jason

Facebook – Jason Pereira's Facebook

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Jason talks ESG (Environmental, Social, Governance) with Daniel Jacob, Founder of Changing Habits Solutions; a market leading ESG Consultancy that helps businesses incorporate ESG and sustainability strategies into their business model.

Episode Highlights:

• 0.57: Daniel says that they help companies integrate Environmental Social and Governance metrics into daily corporate operations and develop strategies to improve their ESG performance over time.
• 3.01: The "E" in ESG stands for Environmental and it takes into account how a company uses natural resources, like water for example, as well as the impacts of its operations on the environment and the communities it operates in.
• 10.44: Diversity, equity, and inclusion matrix are associated not only with the gender profile of the organization, but by category or by seniority within your organization, says Daniel. 
• 13.07: Investors are increasingly looking to de-risk their portfolio and businesses developing more ESG practices typically means a better investment opportunity, says Daniel. 
• 14.58: "For every risk there is an equal opportunity. If you take climate change as a risk perspective and start to assess, how can I reduce my emissions into carbon credit this is a potential revenue generating scheme"
• 22.01: There are over 1000 different metrics or issues under ESG combined. You want to make sure that you focus on the top ten or twenty on which you can have a material impact, says Daniel. Daniel talks about how you establish and use ESG metrics and how they are different from any other business key performance indicators that they may utilize. 

3 Key Points:

1. There are over 1000 different metrics or issues under ESG combined. You want to make sure that you focus on the top ten or twenty on which you can have a material impact, says Daniel.
2. Daniel talks about how you establish and use ESG metrics and how they are different from any other business key performance indicators that they may utilize.
3. Daniel talks about the actual net reciprocal benefit of ESG. He shares what is the feedback cycle on this underlying business metrics that really matter to business owners which is profitability, costs and revenue?

Tweetable Quotes:

• "If you are going to do something about sustainability in your own company, your suppliers need to get to the same level as you." – Daniel. 
• "We have been operating in a way that doesn't consider the environment. Sustainability includes our economy's long term ability to survive" – Daniel.
• "As investors, we should be empowered with as much information as possible to make decisions for someone who might invest in." - Jason

Resources Mentioned:

• LinkedIn – Jason Pereira's LinkedIn
• LinkedIn - Daniel Jacob's LinkedIn
• Website - Daniel Jacob
• Visit Changing Habits: Changing Habits Solutions - ESG Consultants
• Book A Free ESG Consultation: Calendly - Daniel Jacob

Full Transcript

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Jason Pereira talks to Jeff Cullen, Owner & Lead Consultant at Basecamp4; a company that specializes in exit planning.

Episode Highlights:

• 1.05: Exit planning is an emergent specialization in management consulting. It is particularly being driven by the saying that time is running short for a lot of business owners.
• 1.54: The whole idea behind exit planning is to maximize value and basically get the most successful exit plan or exit from your business as possible, says Jeff. 
• 3.42: Exit planning institutes have done tons of research on the numbers of companies that don't successfully exit, and it's a pretty shockingly high number.
• 6.11: You can't manage a 25-to-35-person company the same way that you can manage an 8-person company, and that is one of the first steps where owners may run into problems, says Jeff. 
• 6.57: Jeff shares how he starts assessing business to understand where the holes are. What does his process look like to understand what's going on with that business?
• 7.11: The business assessment method that Jeff uses is a lot more holistic. They have three-legged tools which are basically the business, the financial plan for the individual and their family and then there is also the personal side.
• 10.04: The assessment is done in a way that everything is kind of transparent and there is a logical progression where most owners know how they are performing, says Jeff. 
• 12.33: When you do exit, it's not a disaster. If any exit happens unexpectedly, the company can survive, says Jeff. 
• 13.42: Jeff shares in terms of fixing gaps, how much resistance does he sees on an average to acceptance by business owners?
• 15.29: As the biggest business starts to run better, become more systematized and the owner moves into a more of a strategic leadership position frustration gets reduced, says Jeff.
• 19.32: If an owner doesn't have a financial planner or if the financial planner, they have is someone they have been using from their 20s and not working as desired Jeff would probably raise the idea of, we want to connect you with somebody who is a bit more sophisticated.
• 26.06: Jason advises everyone that do not deal with generous lawyers. Deal with specialist lawyers who do or handle the expert cases all the time. 

3 Key Points:

1. Jeff explains how exit planning is for the most cases is no different than business planning.
2. Jeff talks about the gap analysis that he conducts and how he explains to business owners what it takes to go from the two to the 4X multiple and how they assess those gaps.
3. Jeff answers how many people in Canada take well to the fact they are telling their baby is not pretty if baby is business?

Tweetable Quotes:

• "Everybody exits at some point. You can either do it vertically or horizontally, it's your call." – Jason
• "Being in control, getting the outcome you want and not having to compromise significantly can be defined as a success." – Jeff
• "There are any number of times where professionals will outgrow the advisors that they are dealing with, whether it be financial advisor or account boy." – Jason

Resources Mentioned:

• Facebook – Jason Pereira's Facebook
• LinkedIn – Jason Pereira's LinkedIn
• Jeff Cullen – Website

Transcript

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Jason Pereira talks to Jason Watt. He recently was part of the sale of his family business. Today they will discuss the tales of what it's like to sell a family business. They will also discuss the ups and downs and unexpected turns that may be included in that. 

Episode Highlights:

• 1.06: Watt trains financial planners and he was never a financial planner previously. He was in the military till 2006 then he entered the family business.
• 1.58: Watt says that they had a pretty good transition as far as family businesses go and in 2018, he became CEO of family business. There was no friction back and forth about control from the elder generation to the younger generation or any of that kind of stuff.
• 4.33: The due diligence process must have alerted Jason Watt to issues and deficiencies that he had and that he needed to get cleaned up prior to any kind of sale, says Jason.
• 7.15: There was a very short meeting in January 2020 with local company Yardstick and Jason Watt talked price a little bit just to kind of get a feel for whether it would be enough money for them to consider a deal seriously and whether the price would be right for the buyer to make a deal work. 
• 12.37: The working capital is important to business as any talent they have or any equipment they have acquired because it is also a part of the factory process.
• 15.36: Jason Watt talks about the negotiation of the deal. What is the methodology of price negotiation, its timeline and how that goes?
• 18.38: Jason Watt doesn't have a big product liability concern or anything like that and in fact there was a sort of pro buyer reason for the share sale because there are a bunch of regulatory approvals that go along with business.
• 20.10: Jason Watt shares after the negotiations stage, how long does it take to come to the final contract. 
• 23.01: It took six and half months from negotiation to final conclusion and Jason Watt thinks that is a reasonable time frame. It should have closed a month earlier than that if they hadn't had that sort of shareholder reorg snag.
• 31.20: Jason Watt faced some complicated tax issues where his accountant helped him to resolve the issue.  
• 32.59: The due diligence process is a two way as much as you should be, you know going through and providing a lot of information about your business, you should be learning about the business that's acquiring you, says Jason Watt.

3 Key Points:

1. If the parents are deeply entrenched within the business operation or the value relative to cash flow is not something that's going to work out over a reasonable amount of time then you do have to consider a third party, says Jason. 
2. Working capital adjustment, shareholder loans and all similar things were things that Jason Watt wasn't as prepared to deal with because they were pretty good about sort of operational metrics.
3. Deal with specialist lawyers and people who have been there and understand the process well before.

Tweetable Quotes:

• "When it came time to talk about their retirement meaningfully, we really had to look at a third-party acquirer." – Jason Watt
• "You wouldn't sign the letter of intent if you are not seriously intending to proceed." - Jason Watt
• "As long as you are earning income going forward at a reasonable level, you actually get that credit back." - Jason Pereira

Resources Mentioned:

Facebook – Jason Pereira's Facebook

LinkedIn – Jason Pereira's LinkedIn

Full Transcript

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On today’s episode of FPCBO we have brought back Cato Pastoll from Loop. This time he has got a new product that he is basically working with that solves a very simple problem - Opening of bank accounts for Canadian businesses in the US.

Episode Highlights:

• 1.19: Cato says that early this year, they launched Loop card which is a multi-currency card that allows users to spend in different currencies. Then more recently they launched the loop accounts product which allows users to open accounts in different currencies so a user can do business more seamlessly around the world.
• 5.48: If you get paid in the US dollars with bank account in Canada, bank will convert the money at that point, and they will often add markup as much as 3% on every dollar that you earn. 
• 6.33: We do a digital onboarding process like many other Fintech products. We collect information on the company, fill online application forms, and have business names and address. We collect information on any directors of the business as well, explains Cato.
• 7.12: When you fill some information on the form, and we say you are approved and then once you are approved and once you have the ability to access an account with us you can then go and click on a button and get access to international account details all through platform, says Cato.
• 7.35: Loop card is a multi-currency card that allows you to spend money in different currencies, and one of those currencies is the US dollar.
• 8.10: We allow you collect your money in the US dollars that you can keep as US dollar revenue in USD and then you can use your loop cards to go and spend those US dollars for your expenses in USD, says Cato.
• 9.32: When people encounter the problem, they can go to go to your website, set up an account, get a card and deal with all their American currency build business needs on one end of the border and then bring it back over whatever is left over.
• 11.38: The four products we have are multicurrency accounts product, multicurrency card product, our payments product and then we also have capital product, says Cato.

3 Key Points:

1. In the pandemic companies were thinking to go into local bank branch to get them to open a US account but bank told them, we have a branch in the US however, to open up this account, you are going to need to drive to our nearest branch in the US, says Cato.
2. Cato talks about a multicurrency card. He explains how that works and how it ties into your account. 
3. We call ourselves kind of a bundle banking platform and the reason we use that terminology is we kind of try to do everything in one place. We try to make all the different products and services that a company needs available to them through Loop, says Cato.

Tweetable Quotes:

• “Canadian companies do not set up to get their domestic branches to basically be foreign branches of American banks.” – Jason
• “We allow you to collect through US dollar revenue and if you need to make $50,000 wire payment, we can convert the money to RMB for you and allow you to wire that money to anywhere in the world.” - Cato

Resources Mentioned:

• Facebook – Jason Pereira’s Facebook
• LinkedIn – Jason Pereira’s LinkedIn
• Cato Pastoll – LinkedIn | Website

Full Transcript

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Today we have Terry Ritchie. He is Jason’s go-to guru on all things for American Canadian cross border, and also a friend. Terry is a vice president and partner at Cardinal Point Capital and Cardinal Point Wealth Management, a cross-border or ICPM firm specializing in the cross-border space.

Episode Highlights:

• 1.41: Terry’s responsibility as one of the private wealth managers is to work with typically private clients and individuals with cross-border issues.
• 4.29: In Canada, if you die and do not leave things to your spouse, you must pay all reliable due taxes. Whereas in the US, it's not the same.
• 5.08: In the US, most of the folks who in prior years would have been exposed to the significant estate tax are now off the rules because the tax exemptions have crept up over the years.
• 13.51: Whenever you are over the $60,000 threshold, that's your barometer in the US to determine whether you are filing a requirement. There may not be a state tax at the end of the day, but there may be a requirement to file, says Terry.
• 15.37: The closest counterpart to the tax-free savings account in Canada from the US perspective would be a Roth IRA.
• 16.13: If you do anything like an American in Canada, like setting up a bank account or tax-free saving account, additional compliance requirements must be dealt with on the US side, says Terry.
• 21.03: Framing taxes as a cost-benefit is a way to get around where the breaking point is or where the client wants to make the call for assets, says Jason.
• 26.43: If you are an American Canadian and you have got some property, and if there may be some tactics closure on the US side or you remotely cell it, it's good to keep track of any improvements and receipts when you did it.
• 32.09: We need to think from the IRS and CRA perspective that there is going to be withholding tax requirement that could come into play here when a Canadian ultimately sells their property, and that process can be very, very timely, says Terry.

3 Key Points:

1. If nothing changes on the gift and state rules and other tax rules that were put into play here, from the end of 2025 to the beginning of 2026, the estate and gift tax exemptions and income tax rates will go back to what they were ten years ago, says Terry.
2. Terry talks about the fact that Canadian citizens who never have been American could also find themselves on the subject of the US estate tax.
3. Some people decide to go to Florida, Arizona, or wherever and want to buy a place. Terry explains what should they be concerned about, and what are the best practices to do that?

Tweetable Quotes:

• “Snowbirds or non-residents in the United States have a non-resident state tax imposed on them if they own certain kinds of defined as a US set of assets.” – Terry
• “People don’t realize that assets are not just stock. It can also be Canadian-based mutual funds and ETFs that qualify as US assets.” – Jason
• “Sometimes, it may make sense to hold assets on a joint base and then have transferred death deeds after that.” – Terry

Resources Mentioned

• Facebook – Jason Pereira’s Facebook
• LinkedIn – Jason Pereira’s LinkedIn
• Terry Ritchie - [email protected]

Full Transcript

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Today, we have Shane Slater, Corporate Currency Specialist from FirmaFX. He talks about foreign exchanges, how it impacts business owners and how you can do better than just taking what the bank or your credit card will give you.

Episode Highlights:

• 1.15: Shane is a corporate currency specialist which means he helps SMEs who get exposed to international business and FX dealings on a regular daily business.
• 1.44: We are reducing the margins that the big banks are typically known for and providing services or advising when the rates may go in the company's favour and when there is an opportune time to do an exchange, says Shane.
• 4.09: The exchange which is in labor intensive and there is no material cost is quite excessive. You can get well under 1% depending on your volume and its better ease and convenience type situation, explains Shane.
• 4.26: The exchange rate is what it is, but if you are losing 3.5% on hundreds of thousands or millions of dollars each way from your profit that should be going to your pocket to reinvest in your business is not good.
• 5.33: On the minimum about $10,000 per transaction is a point where you are going to start saving 2 to $3 per transaction using a broker from FirmaFX, says Shane.
• 06.00: Shane talks about the challenge for business owners in international wire transfers and how he helps them with that. 
• 10.12: The currency hedging is the idea to guarantee you price point for at least some of your exchange so that you have the peace of mind of knowing exactly what you're going to pay or exactly what you're going to receive. 
• 15.24: Jason explains that you don't have to be able to calculate all the stuff in hedging transactions because in principle the contracts are very straightforward for people.

3 Key Points:

1. Shane talks about the costs associated to the consumer or the business owner when making a currency exchange.
2. Hedging is basically a process where you eliminate risks. Shane talks about what can be done to mitigate the risk of fluctuation of currency when you have business in one country, and you are delivering stuff in another country.
3. Hedging strategies change depending on every single client's position and need like what are your potential waters or what is your actual margins. If you're a tight margin business, Shane recommends hedging a good portion of your FX.

Tweetable Quotes:

• "We are able to save companies not just money, but time also that they can then put back into their business and doing what they do best and help them grill in a multiple of ways." - Shane
• "Some businesses consider hedging like gambling, but it's the exact opposite. But the general concept is you are exposing yourself to sometimes millions of dollars throughout years on a FX rate and they are budgeting this FX rate for your currency exchange." - Shane 

Resources Mentioned:

• Facebook – Jason Pereira's Facebook
• LinkedIn – Jason Pereira's LinkedIn
• Shane Slater – LinkedIn | Website 

Full Transcript

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Today's the 5th part of a series on understanding financial statements.

Episode Highlights:

• 01:10: Different provinces have different amounts. Today, on top of that, anywhere from zero to 4%, depending on what province. One will actually apply that zero percent rate up to 600,000, but for all intents and purposes, the half $1,000,000 mark represents a small business's income. 
• 03:40: $500,000 is a business limit or exemption. So, for the first $500,000 you get to pay the lower rate, but if you have more than $50,000 investment income. They start taking back the amount they start, reducing the 500,000 at a rate of $5 for every $1 earned in passive income.
• 08:14: The first national account is the general rate income pool. You may realize that there are actually 2 different tax rates payable on dividends in Canada.
• 08:33: There are three depending on where they came from. The third one is that foreign dividends that are not considered eligible for dividend tax credits. So, they are basically taxed as income.
• 09:58: The general rate income pool is a calculation of the money that you pay tax on or the income that you pay tax on at the general rate. So, anything that wasn't the small business rate is the pool of money that you can distribute as an eligible dividend. 
• 11:53: Any insurance proceeds from the death of an individual above and beyond the adjusted cost basis are considered a game. They flow into the CDA. Why does the CDA matter? Because the CDA is an amount that the individual can draw tax-free from the corporation. 
• 19:05: RDTOH allows you to take money out at a tax preference because you've already paid some of the tax and get some tax refund.
• 21:19: Why does this number matter? This number matters if you have a corporate structure in place. If you have two corporations, one corporation owning another, and you want to transfer money between these corporations, you can transfer by way of intercorporate dividends.

3 Key Points:

1. In 2018, there is a tax change that happened that basically will change your tax rates corporately for passive income. Total passive income or what's known as aggregate investment income exceeds $50,000 and it will increase. You will pay an increase straight up until about $150,000, which will go back to normal.
2. Why would the government allow you to take money tax for you to be a corporation? Let's look at investment capital gains. Half of it is tax free, there is no real difference there. It's going to result in you paying the same tax that you would otherwise. So, if you take a capital gain and pay 100% of the proceeds out and you end up paying at most 26%, Insurance is different.
3. The purpose of RDTOH is to extract the corporation of the companies, the government, extracting more income from you corporately now than they would if you paid to yourself personally. If you pay it to yourself personally then they refund you the difference.

Tweetable Quotes:

• "The eligible dividend is basically the dividend paid after tax income that paid the general rate that paid the higher the two. So, if I pay a higher rate corporately, I pay a lower rate personally, if I pay a lower rate corporately, I pay a higher rate personally." – Jason
• "Insurance is different because the CDA is a mechanism for flowing out the gains tax-free to the shareholders." – Jason

Resources Mentioned:

Facebook – Jason's

LinkedIn – Jason's

Full Transcript

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