MURBs: A Tax Shelter on Shaky Ground
Multiple-unit residential building (MURB) investment was a popular Canadian tax shelter in the 1970s as it was a low-risk investment providing huge tax write-offs. The situation has changed. The historical development of the MURB as a tax shelter portrays a changing level of incentives. First, incentives to invest in existing buildings, then to build new buildings. The introduction of soft-cost deductions created a boom in building. Gradually, the Department of Finance began to feel that capital cost allowances of ten percent were too generous and the National Revenue felt the same about soft-cost deductions. Residential real estate investment as a tax shelter ceased as of the November 12, 1981 federal budget, which completely eliminated MURB programs and required soft costs on buildings to be capitalized until construction was completed. Soft-cost deductions were disallowed except for four circumstances. One clause stated that the project progress without undue delay, but there were loopholes. The Department of National Revenue is now examining areas it believes were abused, such as resort construction. Other areas open to attack include: 1) when soft costs were incurred by a partnership before the investor acquired an interest, 2) when the amount of soft costs was estimated, 3) when individual soft costs are not deemed deductible according to the income tax, 4) when the amount deducted is unreasonable, 5) when the timing of the deduction is not appropriate and 6) when the allocation of soft costs was inappropriately allocated between the land and building. A settlement proposal would be the best method of resolving the problem for both the department and taxpayers.
Publication Name: CA Magazine
Pack up your troubles
The design of the suitcase has evolved from the heavy trunk to lightweight space-saving products. Suitcase designers are tasked with improving performance and reducing weight while looking for ways to reduce costs. Early materials used for luggages were wood and fiberboard. The advent of molded plastics such as polypropylene, nylon, polycarbonate, thermoplastic elastomers, polyurethane and acetyl revolutionized the industry. Soft materials which are being considered are vinyl, nylon and textile laminates.
Publication Name: I.D.
Herman Miller and commercial carpet manufacturer Interface Architectural Resources have designed a floor system based on the concept of the dynamic office which employs temporary workers. The basic idea is to have a system of layered floor tiles and underneath is a Legolike system which allows cables for electrical power for the computers and other office equipment be routed directly to the furniture which are connected to the floor system through small holes.
Publication Name: I.D.
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