Capital Gains

[DarrylFlint]

I`ve just sold a rental a property for a profit. I know that Capital Gains Taxes will be due in the spring so I need to put away enough money from the sale to make sure that I will have these covered. My dilema is what to do with the money short term to get the maximum return. A savings account certainly doesn`t seem the right way to go...money markets pay about 2.5%...there must be something better? Does anyone have any suggestions about what would be good to do with the money for about 6-8 months? Thanks for any suggestions that you may have?

 

[RArora]

Dont think ur looking at this option but savings acct at ING or PC interest first account is giving 3%

 

[DianneDachyshyn]

I found a bank that is paying 4% with no fees and no minimum balances. It is called People`s Trust (www.peoplestrust.com) and their savings account is called People`s Choice. Check it out.

 

[MrHamilton]

QUOTE (DarrylFlint @ Aug 13 2008, 09:50 PM) I`ve just sold a rental a property for a profit. I know that Capital Gains Taxes will be due in the spring so I need to put away enough money from the sale to make sure that I will have these covered. My dilema is what to do with the money short term to get the maximum return. A savings account certainly doesn`t seem the right way to go...money markets pay about 2.5%...there must be something better? Does anyone have any suggestions about what would be good to do with the money for about 6-8 months? Thanks for any suggestions that you may have?

congrats on the sale!

This is a situation where a HELOC is great. I have a Manulife ONE account where you can pay down your mortgage as much as you want. Interest rates for negative balances are prime (currently 4.75%) and pays 2.9% for positive balances.

Hope that help!

 

[donksky]

Apart from the suggestion above, I don`t think you can get "maximum return" or high return within 6-8 months in traditional products - `coz short-term goes with lower returns, the longer you can lend ur money to the institution, the higher you`ll earn and they base it on variable rates, which are currently still very low. a CD/GIC equivalent in another, high interest country would work -but u`d need a relative/reliable contact overseas and know the legalities. I used to earn high interest in an account in another country thru my retired dad`s company`s credit union privileges but we had a brother locally monitoring/renewing things.

 

[DarrylFlint]

Thanks to everyone for your replies and suggestions.

 

[DonCampbell]

Pay off one of your most expensive Line of Credit (if you have any) that will give you a good return for the short period. BUT... Don`t use the new found space on the line, save it for tax time.

 

[Thomas Beyer]

QUOTE (DarrylFlint @ Aug 13 2008, 07:50 PM) I`ve just sold a rental a property for a profit. I know that Capital Gains Taxes will be due in the spring so I need to put away enough money from the sale to make sure that I will have these covered. My dilema is what to do with the money short term to get the maximum return. A savings account certainly doesn`t seem the right way to go...money markets pay about 2.5%...there must be something better? Does anyone have any suggestions about what would be good to do with the money for about 6-8 months? Thanks for any suggestions that you may have?

many choices:

a) pay down expensive debt like a CC or car loan

b) do you have a LOC on your house ? pay it down .. you get prime (at 4.75% right now) basically as savings ..

3) buy a quality stock and sell call options against it !

4) sell OEX puts/calls

5) buy a REIT or dividend stock with low volatility (like BoardWalk, Canada`s largest landlord .. you`ll get 4-5% monthly payment .. maybe some equity upside)

6) invest in yourself (education or vacation)

7) donate 10% of the gain

8) money market fund (2.5 to 4% right now .. depends on bank)

9) invest in a short term 2nd mortgage (there are several options that yield 10% plus .. some want the money at least a year or 2 though ..)

10) check the paper (Globe and Mail, Calgary Herald, ..) for investment options .. there are some decent ones ..