Mackenzie changes require action.
Many people give only a cursory glance to mailings from mutual fund companies. But if you’ve received a letter from Mackenzie Financial recently, you should read it carefully.
In August, Mackenzie implemented several fund mergers that could have tax implications if you own units outside a registered plan. However, there is a way around them if you take appropriate action.
The potential problem arises in cases where a mutual fund trust is being merged into Mackenzie’s Capital Class structure, which is a mutual fund corporation. When the units are held outside a registered plan, this results in a realized capital gain or loss. Funds affected include Mackenzie Universal Health Sciences and several Scudder entries, which are being phased out.
If you have a capital loss, you may choose to do nothing so that you can claim it when you file your 2002 tax return. But if you have a gain, you can defer paying taxes on it by exercising a special election. To do this, you must complete the tax information package provided by Mackenzie and return it to them by Nov. 8. If you haven’t received one and want to take advantage of this, contact your financial adviso
This article originally appeared in Mutual Funds Update, a monthly newsletter that provides portfolio-building and fund selection guidance for investors. For information and to read a free sample copy, go to: http://www.buildingwealth.ca/mfudemo.cfm