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Option gains aren’t taxed as capital gains, so that doesn’t make sense. There are some preferential tax treatments of some employee option plans, up to $200K a year worth—did that get changed too? (There are capital gains taxes on profits above the market value at exercise time but that’s just…buying a stock.)
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Apr 18, 2024 21:05
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It's funny because I always see posts on LinkedIn from founders talking about how you shouldn't build a business with an exit in mind. You need to build a company that you're passionate about that addresses a real world need and everything will flow from that. Now the same execs are posting essays about how innovation in Canada is dead because no one will want to start a business here knowing how much they;'ll be taxed after selling it.
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Apr 18, 2024 21:08
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Femtosecond posted:I can understand why doctor/lawyer/dentists would be mad in this moment as their retirement may be negatively impacted by this change, but hey, maybe there was some risk in pursuing an arguably exotic tax scheme instead of doing something boring that aligns with everyone else in the country. Maybe your tax professional should have discussed regulatory risk with you! Sorry! As a physician, I personally support this move. I'm a rare salaried doc and keep relatively little in my PC. These changes aren't likely to ever affect me. Despite my own challenges, my career affords me a lifestyle many Canadians cannot reach and I try to remain grateful for that. But I will defend some angry docs - the provinces sold us the idea of incorporation to save money rather than increase billing codes, which have not come close to increasing with inflation. The vast majority of physicians don't have pensions or benefits and self-fund both. And most don't get to start practicing (and start saving for retirement) until in their 30s or later. Plus many of us start >$200K or more in debt on day one. We cannot strike to seek better conditions. I can understand some physicians being fed up with perceived financial penalties after being continuously overworked and underappreciated in a crumbling system trying to keep other people alive. I hope more physicians don't choose to leave for other jurisdictions. Most won't but even losing a few may teeter the system.
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Apr 18, 2024 21:14
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Subjunctive posted:Option gains aren’t taxed as capital gains, so that doesn’t make sense. There are some preferential tax treatments of some employee option plans, up to $200K a year worth—did that get changed too? Yeah, I just looked and they're taxed as income with a specific 50% options deduction that is similar to how capital gains are treated but not technically the same thing. They should be changing this as well, because it was clearly designed to parallel capital gains, but who knows Edit: the options deduction got capped at 200k a few years back. So it's already more restrictive than the capital gains changes.
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Apr 18, 2024 21:18
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Mr. Apollo posted:It's funny because I always see posts on LinkedIn from founders talking about how you shouldn't build a business with an exit in mind. You need to build a company that you're passionate about that addresses a real world need and everything will flow from that. It’s good advice because honestly you’re going to work like hell and probably end up with nothing but some leftover branded water bottles, so it might as well be something you really care about doing.
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Apr 18, 2024 21:20
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T.C. posted:Yeah, I just looked and they're taxed as income with a specific 50% options deduction that is similar to how capital gains are treated but not technically the same thing. Yeah anyone who is complaining about their option-heavy comp being harmed is very confused at best.
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Apr 18, 2024 21:22
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Subjunctive posted:VC funds are built on capital gains. That’s how they return their profits to the LPs. Founders also generally have their equity profit, on acquisition, end up at least partially as capital gains. So I guess Canada could become less attractive as a place to put money into VC funds, or for VC funds to operate, and that would in turn reduce available funding for Canadian companies. (I don’t know how the taxes work if a US fund invests in a Canadian company because I’ve never been close to a case like that where the investors made money!) Yeah this is the part I was unclear on. I mean the notion we're being pitched in these articles is that somehow external investment will go down, but if they invest in some Canadian startup and see great success won't those capital gains to those investors be taxed in their own local jurisdiction? (So eg. if they were from the USA the capital gains tax rate would most likely be either 15% or 20%) And for Canadian investors, well ok what else are you gonna invest in then? All capital gains is handled the same whether it's ultra risky Canadian startup or Nike stock on the S&P500. I'm not really sure I understand how things change for investors either way unless it's something to do with the inner workings of a VC structure. Like if returns are not some sort of "flow through" type instrument whereby the Canadian based VC is taxed on the gain using Canadian cap gains and investors of any jurisdiction only after that point make money through a dividend or some other mechanism. But yea that seems weird because it seems better to just handle things (if possible) such that the gain is handled entirely by the end investor in whatever jurisdiction they reside. Subjunctive posted:I have never met a founder who gave a poo poo about capital gains on their future exit when they were starting a company. Having something more than $250K to get taxed on is a victory. You get to put “(acq)” after every mention of your company in your Twitter or conference bios, and will always get introduced as having had a “profitable exit”. It’s all good. This is my sense as well as someone who has not formed a startup (but thought about it) and is a very small time investor. Gains are good! I recall my old CEO was pretty delighted when he was able to do a bit of revenue sharing (something that netted me ~$7000) saying that a goal of his was to give people small tax complications (highlighting that if this happened it was a good thing because you made an extra surprising amount of money).
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Apr 18, 2024 21:23
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Subjunctive posted:It’s good advice because honestly you’re going to work like hell and probably end up with nothing but some leftover branded water bottles, so it might as well be something you really care about doing. I also reminded of a story one of my professors told me. he had a friend who had to write a cheque to the CRA for almost $1 million in taxes for his business. The professor asked his friend why he wasn't upset about paying that much in tax. His friend answered something like "Do you know how much money I made to have a $1 million tax bill?" Mr. Apollo fucked around with this message at 21:34 on Apr 18, 2024 |
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Apr 18, 2024 21:31
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Femtosecond posted:Yeah this is the part I was unclear on. I mean the notion we're being pitched in these articles is that somehow external investment will go down, but if they invest in some Canadian startup and see great success won't those capital gains to those investors be taxed in their own local jurisdiction? (So eg. if they were from the USA the capital gains tax rate would most likely be either 15% or 20%) No, the situation is that you have a VC fund in Canada that needs money for it to invest. Limited partners in other countries put capital into the fund. The VC invests in Femtoco. They then sell their shares after Femtoco goes public as TO.FEM. The profit from that sale is taxed as capital gains to the fund, and the fund later pays returns to the LPs out of post-tax dollars. There are fewer of those dollars if the capital gains tax is higher.
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Apr 18, 2024 21:33
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DandyWalker posted:As a physician, I personally support this move. I'm a rare salaried doc and keep relatively little in my PC. These changes aren't likely to ever affect me. Despite my own challenges, my career affords me a lifestyle many Canadians cannot reach and I try to remain grateful for that. Oof yea if the Provinces were suggesting that doctors do this sort of thing then that is a bit of a rug pull. That is unfortunate. Ultimately I think it is best if all Canadians are on the same page with regard to tax treatment. Treat doctors the same as everyone else and compensate them more if it's a problem. Subjunctive posted:No, the situation is that you have a VC fund in Canada that needs money for it to invest. Limited partners in other countries put capital into the fund. The VC invests in Femtoco. They then sell their shares after Femtoco goes public as TO.FEM. The profit from that sale is taxed as capital gains to the fund, and the fund later pays returns to the LPs out of post-tax dollars. There are fewer of those dollars if the capital gains tax is higher. Ok yeah that makes sense to me. Helpful thx.
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Apr 18, 2024 23:22
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GTA new home sales down to record low in Q1. Builders, especially of condos, are cutting back on construction due to sluggish pre-sales and rising construction costs (so they say). Also, this is the kind of poo poo some of them were building: https://twitter.com/StephenPunwasi/status/1766521859414147216 I understand people in physically-constrained* spaces like Vancouver being frustrated by NIMBYism stalling densification but this is absolutely not the problem in the GTA, which has had lots of construction in the last 20+ years. There is no free market supply-side solution. *constrained from sprawling more, I mean.
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Apr 24, 2024 18:11
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The condos built in the past ten years or so weren't built to be high-rise worker camps. They were built to be tiny boxes that are there for trading back and forth between
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Apr 24, 2024 18:35
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Precambrian Video Games posted:GTA new home sales down to record low in Q1. Builders, especially of condos, are cutting back on construction due to sluggish pre-sales and rising construction costs (so they say). Also, this is the kind of poo poo some of them were building: Lmao. This is literally just a normal 400sqft 1 bed with a piece of drywall to make it a 2 bed. What a joke, but I mean, you're an idiot if you buy this, it's not like you didn't have the floor plan right?
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Apr 24, 2024 19:20
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You should probably not buy units in buildings where 100sqft of the 400sqft one bedrooms are hallway and entryway. It's a clear indication that developer was maximizing unit count at all cost, including any sort of useable layout, and is likely 'optimizing' everything else as will
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Apr 24, 2024 19:27
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Precambrian Video Games posted:GTA new home sales down to record low in Q1. Builders, especially of condos, are cutting back on construction due to sluggish pre-sales and rising construction costs (so they say). Also, this is the kind of poo poo some of them were building: It's called providing housing supply, and it will fix the affordability crisis.
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Apr 24, 2024 19:44
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Precambrian Video Games posted:GTA new home sales down to record low in Q1. Builders, especially of condos, are cutting back on construction due to sluggish pre-sales and rising construction costs (so they say). Also, this is the kind of poo poo some of them were building: Downtown Toronto has had zero problems with construction, but when you expand that to the GTA, there really is a supply problem. This is data from 2016 to 2021.  Sure, some parts of GTA have been building like crazy, but there are entire neighborhoods, even in Toronto proper, that have lost more housing than they have built, and those neighborhoods aren't hard to find.
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Apr 24, 2024 20:00
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About 10 years ago, I walked through demo unit for a new condo on Adelaide St W in Toronto. It didn’t have a place for a stove or a full size fridge. It just had an under the counter bar fridge. The sales rep said that their studies showed that the people living there would be young urban professionals and they ordered takeout for almost every meal so a microwave and mini fridge would suffice.
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Apr 24, 2024 23:28
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Mr. Apollo posted:About 10 years ago, I walked through demo unit for a new condo on Adelaide St W in Toronto. It didn’t have a place for a stove or a full size fridge. It just had an under the counter bar fridge. The sales rep said that their studies showed that the people living there would be young urban professionals and they ordered takeout for almost every meal so a microwave and mini fridge would suffice. Ah yes, the old "Millennials don't care about wealth generation. Look at how few of them chose to be wealthy!"
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Apr 25, 2024 00:00
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Part of the issue with bad unit layouts is related to the small floorplates (750 m²) that high rise buildings are restricted to by Toronto city policy. The city does not want anything like the larger (and more comfortable and better laid out) towers that were built in the 70s and 80s anymore largely because of wind and shadow impacts, I believe. https://www.toronto.ca/wp-content/uploads/2018/01/96ea-cityplanning-tall-buildings-may2013-final-AODA.pdf quote:Regardless of stylistic approach, the design and placement of all tall buildings should make a positive contribution to the public realm, fit harmoniously within the surrounding context and skyline, and be consistent with the following: quote:Limit the tower floor plate to 750 square metres or less per floor, including all built area within the building, but excluding balconies.
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Apr 25, 2024 00:50
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thats kind of a stretch to excuse developers that are trying to market condos to airbnb investors and fit as many units into as little square feet as possible because it's more profitable
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Apr 25, 2024 01:26
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It's not the sole reason but small floorplates encourage "creative" layouts while the marginal cost from building larger floorplates are small. So it's one of the ways bad municipal policies stop better housing from being built.
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Apr 25, 2024 03:05
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I remember, when I was a wee lad, coming up with an idea for a sci-fi pod living space that maximized every possible inch. And I've got to say: that idea is better than the skint fuckin condos they're building in Toronto. I at least had the idea of storage pods like overhead bins on airplanes. Honestly, these condos look worse than the worst, cheapest hotel room I've ever seen.
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Apr 25, 2024 03:18
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