Do You Own BCE Shares? (Part 1)

Posted on December 11, 2007 at 3:23 pm
Filed Under Canadian Taxes, Financial Planning, Investment Planning

The Ontario Teachers’ Pension Plan Board is in the process of purchasing all outstanding BCE shares.

This deal was approved by a majority of the common and preferred shareholders on September 21st, 2008 and it is expected to be finalized sometime in 2008. If you own BCE shares, you could feel the effects of this decision in any number of ways throughout 2008. In Part 1 of this post, we will address some of the major implications that BCE shareholders will be forced to deal with. In Part 2, we will address three key strategies that shareholders can use to properly handle their own situation in as favorable a way as possible.

Your Take-Away: The first implication is that most individuals who own BCE shares will be forced to deal with a potentially large capital gain or capital loss over the course of 2008. The size of this potential gain or loss will be based on the shareholders average purchase price of the BCE shares, and the length of time these shares have been owned. The second implication is that this taxable event could negatively effect a shareholders government benefits such as available tax credits, OAS and the GST credit to name a few. The third implication is that a shareholder relying on the dividend income produced by their BCE shares will have to find additional ways to compensate for the loss of dividends paid as a result of their BCE shares.

Tomorrow we will look at three specific ways that BCE shareholders can effectively plan for and address the possible issues they will face in 2008.

Until next time, have a Terrific Tuesday.

Chris

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