TABLE 1: FTS CASH-FLOW EXAMPLE
Investor Cash In
Investor’s positive cash flow
$19,700
CEE renounced per FTS
$10
Investor’s federal /provincial tax rate
54%
FTS premium per share
$1
Canco regular common share trading price
$9
Subscription price per FTS
$10
Flow-through shares purchased
10,000
Assumptions
TABLE 1: FTS CASH-FLOW EXAMPLE
Investor Cash Out
$124,300
Cost of FTS ($10/share)
10,000
$100,000
Tax savings from $100,000 renounced CEE
$54,000
$100,000
Investor’s proceeds from selling FTS in market
$90,000
$100,000
Tax owing on capital gain from sale of FTS
$90,000
$24,300
Tax owing on capital gain from sale of FTS
$144,000
$124,300