Ken Stern’s Post

April 2024 Federal Budget Impact on Flow Through Share Structured Transactions   The Federal Budget made a significant change, substantially increasing the percentage of capital gains subject to tax. This takes effect June 25th, 2024. Any Flow-through shares bought before that date will be at the current 50% inclusion rate. To take advantage of current tax rules, the transaction must close by June 24th! In the coming days and weeks we expect tens of millions in corporate and personal flow-through share product coming down the pipeline. Consider reserving an allocation quickly as donor and investor demand is likely to be quite high between now and the June deadline.   Here are the basics: The Federal Budget surprised everyone in the flow-through mining and critical-mineral industry by increasing the capital gain inclusion rates from 50% to 66% as of June 25th. Flow-through shares have a zero adjusted cost base. Therefore, 100% of the proceeds of sale is a capital gain. By participating before June 25th, you save the extra 16% inclusion - a material benefit. There is no change to the inclusion rate for individuals if the total capital gain is below the $250k threshold. Over ~$350K of flows puts you in the higher capital gain inclusion rate of 66%. We can calculate a blended rate benefit for large buyers.    After June 25th, corporate flow purchases will probably no longer be beneficial. But we do have corporate product coming soon and will close well before the June 25th deadline.   The key is to get in touch and get on the client waiting list.   * New 2024 Alternate Minimum Tax (AMT) calculations will replace the old AMT immediately. For personal flow buyers, this will mean the maximum you can purchase is approximately a third less than the maximum in past years. We can estimate what your current maximum would be. AMT does not apply to corporations, hence there is an opportunity to decrease corporate tax to zero.    Together, with our industry partners at the Mining Association of Canada (MAC), the Prospectors & Developers Association of Canada (PDAC), and many others, our team has started engaging with government to demonstrate how this increase to the capital gains inclusion rate will have a devastating impact on our country’s Critical Mineral Strategy and charitable flow donations. There is no guarantee that we can persuade Finance to make changes. But we are trying.   Our flow-through structure with immediate liquidity accounts for approximately 85% of all critical mineral junior mining exploration in Canada. The Canadian government has publicly stated many times that there is no path to zero carbon without critical minerals. Finance may not be aware of the damage to charity critical mineral structured flows their capital gain increase will have, and we will be lobbying officials to reconsider this as it applies to mining and exploration in Canada.

Canadian businesses and entrepreneurs as well as family offices and UHNW are facing an ugly taxation scheme with the increase in capital gains. As capital gains (once the asset / shares are sold) becomes taxable income, one hidden gem, a small flame still burning that the Canadian government is looking at stamping out, but as of yet has not, is Flow Though investments in Mineral Exploration. Invest the amount of income tax (including capital gains) you would pay annually to the Canadian government into a mineral exploration company offering flow through shares and offset 100% of your personal or corporate income tax that year while getting equity (shares) in a company exploring for commodities in Canada. The company must spend the capital on exploration (keeps the issuer accountable) and you or your Corp get the upside and either another capital gains tax or tax loss at the end of the year (while you've offset your income tax by 100%) You can see the snowball effect of rolling your capital gains tax over year over year if taking profits. If holding long term, there has never been a better time to construct a portfolio in mineral exploration in the last decade, yes the fundamentals are in place for a bull market. Most importantly, you can allocate your own tax dollars! As we've seen how they are allocated without your discretion.... There are several LPs that you can subscribe to that have qualified experts that allocate to the mineral exploration companies where you simply get the tax deduction and performance of the fund. And then there is a more direct approach of identifying your own investments in smaller earlier staged names. Either way can work. The Canadian Government is assessing whether or not to keep Flow Though investing as a structure and this could be the last year to enjoy such a lovely offset Talk to you financial advisor and or accountant. If they don't know about this, find a new financial advisor or accountant.... Konrad Kopacz and Justin Lim at LK Weath & Asset Management have been super helpful for my network. feel free to reach out to them if you want to take control of your tax dollars and benefit from them....

Very hard to substantiate. Company needs to be properly audited

The Darwin Mine - A Qualified Opportunity Zone Property. Facts about opportunity zones The Tax Cuts and Jobs Act included changes for businesses and individuals. One of these is the creation of the Opportunity Zones tax incentive, an economic development tool that allows people to invest in distressed areas. This incentive's purpose is to spur economic development and job creation in distressed communities by providing tax benefits to investors. Low income communities and certain contiguous communities qualify as Opportunity Zones if a state, the District of Columbia or a U.S. territory nominated them for that designation and the U.S. Treasury certified that nomination. Following the nomination process, 8,764 communities in all 50 states, the District of Columbia and five U.S. territories were certified as Qualified Opportunity Zones (QOZs). Benefits of investing in opportunity zones Opportunity Zones offer tax benefits to business or individual investors who can elect to temporarily defer tax on capital gains if they timely invest those gain amounts in a Qualified Opportunity Fund (QOF). Investors can defer tax on the invested gain amounts until the date they sell or exchange the QOF investment, or Dec. 31, 2026, whichever is earlier. The length of time the taxpayer holds the QOF investment determines the tax benefits they receive. If the investor holds the QOF investment for at least five years, the basis of the QOF investment increases by 10% of the deferred gain. If the investor holds the QOF investment for at least seven years, the basis of the QOF investment increases to 15% of the deferred gain. If the investor holds the investment in the QOF for at least 10 years, the investor is eligible to elect to adjust the basis of the QOF investment to its fair market value on the date that the QOF investment is sold or exchanged. Deferral of Eligible Gain Gains that may be deferred are called "eligible gains." They include both capital gains and qualified 1231 gains, but only gains that would be recognized for federal income tax purposes before Jan. 1, 2027, and that aren't from a transaction with a related person. To obtain this deferral, the amount of the eligible gain must be timely invested in a QOF in exchange for an equity interest in the QOF (qualifying investment). Once this is done, taxpayers can claim the deferral on their federal income tax return for the taxable year in which the gain would have been recognized if they had not deferred it. Need more information about the Darwin Mine, it's resources, and how to invest in this property ? Contact me at prochorusg@gmail.com or call me at 604-3020746

Once again, the WA mining and resources sector is underpinning the WA budget surplus, to support the State's economic health and help fund essential infrastructure, frontline services, and cost of living relief to WA communities.

Investing in Sovereign Gold Bonds (SGBs) has become increasingly popular due to the tax benefits and strong returns they offer. Here’s a comprehensive look at the tax implications and current returns on SGBs, making them an attractive option for long-term investment. Tax Implications of Sovereign Gold Bonds Capital Gains: When SGBs are redeemed upon maturity (typically after 8 years), the capital gains are exempt from tax. This is a significant advantage over other forms of gold investments. For bonds held to maturity, you don't need to declare capital gains in Schedule Capital Gains of ITR2. Instead, report them under 'Other Exempt Income' in Schedule EI, specifying 'any other' as the nature of income. Interest Income: The interest earned on SGBs, currently at a rate of 2.5% per annum, is taxable under 'Income from Other Sources.' This interest is paid semi-annually and should be reported in Schedule OS of your ITR2. Current Returns on Sovereign Gold Bonds SGBs offer returns linked to the market price of gold plus a fixed interest rate. Here’s an overview of the performance: 1. Historical Returns:The compounded annual growth rate (CAGR) of gold over the past several years has been around 8-9% [[❞]] 2. Example of Recent SGB Performance: For an SGB issued in September 2024, the issue price was ₹3,150 per gram, and its current price has appreciated to ₹7,294, yielding a return of about 131.6% since inception [[❞]] 3. Comparison with Physical Gold: Unlike physical gold, SGBs do not incur storage costs or risks associated with holding physical assets. This makes them a safer and more economical option for gold investment [[❞]] Benefits of Investing in Sovereign Gold Bonds 1. Safety and Convenience:SGBs eliminate the risks and costs associated with physical gold. They are held in certificate form, reducing the need for physical storage and the associated security concerns. 2. Tax Advantages: No capital gains tax on redemption if held till maturity, and the interest income is the only taxable component. 3. Fixed Interest Income:Apart from capital appreciation linked to gold prices, investors receive a fixed 2.5% annual interest, paid semi-annually, providing a steady income stream. 4. Hedge Against Inflation:Historically, gold has been a strong hedge against inflation, and SGBs benefit from this characteristic without the downsides of physical gold ownership [[❞]] INTERPRETATION Sovereign Gold Bonds offer a lucrative mix of safety, tax efficiency, and strong returns, making them an excellent choice for investors looking to include gold in their portfolio without the complications of physical gold. If you are considering a long-term investment, SGBs are a compelling option to explore.

HNW home owners with large gains face 38% capital gains tax in California. Here are some ways to avoid them. A few of them also work for primary residences. #taxstrategies

Speak to your BMO advisor to determine if this is the time to revisit your investment, tax and estate planning strategies.

Oregon Sells $158 Mln in Bonds Oregon issued $158 million in bonds to finance various capital projects. The bonds mature between 2024 and 2043, yielding between 3.53% and 4.52%. They pay interest at 5%. The securities received a rating of AA+ from Fitch Ratings, Aa1 from Moody’s Investors Service, and AA+ from S&P Global Ratings. The rating reflects “the state’s strong

(OIO) AHG/QOF Oklahoma Investment Opportunities: Certified Investors: contact us today! 918-557-0697 dmclain@ahgequity.com We take in 1031 exchange: Multi-Family/Commercial development: Opportunity Zone Depreciation recapture is a game changer for certified investors. Here is the breakdown: In the context of an Opportunity Zone (OZ), depreciation functions somewhat differently compared to traditional real estate investments. Here's a breakdown: 1. **Cost Segregation and Bonus Depreciation**: Investors in OZs often use cost segregation studies to identify components of the property that can be depreciated more quickly than the building itself. This accelerates the depreciation schedule, potentially leading to significant tax benefits, especially when combined with bonus depreciation (if applicable). 2. **Depreciation Recapture Avoidance**: A key advantage of investing in an OZ is that if you hold the investment for at least 10 years, the capital gains from the sale of the property are not subject to depreciation recapture. This means you can take advantage of the depreciation benefits without the concern of having to pay back the tax benefits when you sell. 3. **Substantial Improvement Requirement**: To qualify for OZ tax benefits, the property must be substantially improved. This means the investor must spend more on improving the property than the initial cost of the building (excluding the land). Depreciation, especially accelerated depreciation, can help offset some of the costs of these improvements. 4. **Step-up in Basis**: After a 10-year holding period, the basis of the investment in an OZ is stepped up to its fair market value on the date of sale. This can potentially eliminate capital gains on the appreciation of the property. Depreciation in an OZ is a powerful tool for managing tax liability and maximizing returns. It's a key part of the OZ strategy that can make these investments particularly attractive for long-term investors.