Best Way to Recover Losses in a Corporation???

[UTCVenturesLtd]

I have access to a corporation with approx. $300,000 of losses. My accountant said to try and sell it off and it seems more practical to try and recover the losses as the corporation does not have any outstanding issues. It seems that fixing and flipping real estate may be the best way to go (or buying a Tim Horton franchise). Any suguestions based on the current state of the economy?

 

[Thomas Beyer]

Buy undervalued real estate in a rising market .. focus on residential land or residences that can be rented profitable moderately levered.



What is a rising market ? A market with IN-MIGRATION .. a market with GDP growth .. a market with RISING AVERAGE WAGES .. a market with a right-of-centre, low to no debt nor deficit committed government .. a market with a stable democracy .. a market that is reasonably large .. a market with a functioning democracy .. a market with lots of physical resources the world needs .. a market with little corruption and a functioning legal system.



Not many markets qualify .. but here are a few that would qualify: In Canada those 3 provinces: SK, AB, MB, and maybe ON if they elect the right government this fall .. BC is too left leaning and the provinces east of ON are left leaning or too small, although of course pockets of opportunity exists there is you are local and know it well.



Outside of Canada: Brazil .. and maybe a few other S-American countries I know little about. There also may be the odd African nation or the odd oil producing middle eastern country I know little about, like Turkey, Tunesia, Libya or Algeria. Libya beach front property is probably a good investment right now .. as it will be worth more when the war is over !



Why not the US (yet): not a functioning democracy anymore. No party wants to lower the debt or deficit through required tax increases and entitlement spending reductions. Corruption in the financial/political system. Oversupply of houses/condos for at least a decade. Risk of currency depreciation for Canadians.



Why not China: not a democracy. Corruption at the highest levels. No independent justice system. No IP protection. widespread air and water pollution. Civil unrest a possibility. One child policy. Ex-migration.



No European country would qualify .. maybe Germany or France but it too is debt ridden. Maybe Switzerland.



Maybe India.



I am biased as I buy residential land and primarily apartment buildings in AB .. although a trip to Libya would possibly be an even better idea !



If you have better ideas, I'd love to hear them, from you or other posters !



Oh yes, you can TRADE stocks but that really is not investing nor capital gains [although many claim that anyway] !



Happy investing.

 

[bizaro86]

[quote user=ThomasBeyer]Outside of Canada: Brazil .. and maybe a few other S-American countries I know little about.



I would be very, very careful buying property in Brazil. I spent some time there recently, and although the economy is growing very fast, there is no capitalist ethic. Look up the politics of their last president, (Lula da Silva). The new President was his former chief of staff, and politically it would be similar to the US electing Rahm Emanuel. There are also significant risks to their currency at its current level. Buying property under a legal system derived from the Portuguese law by way of nationalist military dictatorship is an idea that should give anyone pause.



If anyone is looking for S.American investments, I'd consider Uruguay or Chile much sooner than Brazil.



Regards,



Michael

 

[brentdavies]

One a more practical and realistic note.



The corporate losses can used against Canadian Income under certain conditons. Work with your accountant.



I had a farm operation that had a large restricted loss which we applied to a number of property sales (capital gains) and reduced the tax payable from $25K to $2K last year. And I thought I could never use the farm loss.



It pays to use a good accountant. Thanks Murji and Associaties.

 

[RussellWestcott]

[quote user=brentdavies]One a more practical and realistic note.



I had a farm operation that had a large restricted loss which we applied to a number of property sales (capital gains) and reduced the tax payable from $25K to $2K last year. And I thought I could never use the farm loss.



It pays to use a good accountant. Thanks Murji and Associaties.




And that is why you have a professional on your team. Brent I imagine you were ok paying your accounting bill this year?



My suggestion to the OP would be to call their personal accountant, and if they are not qualified, you could give a shout to one of the many accountants on this forum to book a consultation.

 

[brentdavies]

Yes, it was a pleasure to pay the accountant's bill.



Buying a company with losses is a great strategy for when you making money.



So make money first, then find a losing company. There many out there.