I recently bought the wife a new watch. Her old one, after 10 good years of use, bit the dust. Based on recommendations of several good friends and the fact I had some decent stock gains we decided to go for a quality name that can last a life time. Looked at Tag Heuer and but both of us agreed they were too gaudy for a lady. I’m not a watch wearer so I don’t care but for her she wanted understated elegance. In the end we So I bought her a beautiful Longines ladies watch. Looking at how to pay for this I decided it was more tax efficient to sell some stocks than to take money from our savings (more on that next post). The only problem was the particular stocks I wanted to sell were in a retirement account that I can’t access at the moment*. So I needed to figure out a way to journal them over to my non registered account without taking a big tax hit.
How I Approached it:
Sold some shares in my non registered account and used that money to buy the watch. Sell an equivalent amount of stocks, specifically ones that had increased in price from my retirement account and repurchase the stocks I sold in my non registered account. This had the effect of journaling them over.
As I was sitting capital losses from my Potash trade I was able to offset the gains I made here resulting in a tax efficient sale
At the moment I haven’t sold any of my Bank of Nova Soctia (TSX:BNS) shares as I feel they are still undervalued and the Dream Global (TSX:DRG.UN) are under a bit of downward pressure at the moment.
I will forgo a small amount of dividends but I willing to do that as I expect to make more from capital gains. If I’m wrong I’m still collecting dividends from BNS.
*not without taking a huge tax hit